Telangana is stepping up its ambitions to become a major data centre and AI infrastructure hub, with the state targeting 5 GW of data centre capacity by 2029 and seeking to attract around $30 billion in investments over the coming years.
Telangana IT Minister D Sridhar Babu announced the target while inaugurating Microsoft’s India South Central datacenter region in the state. The new region is positioned as a strategic infrastructure hub serving India, Asia and the Global South, further strengthening Hyderabad’s role in the country’s expanding digital ecosystem.
Telangana’s Data Centre Capacity Crosses 300 MW
According to the state government, Telangana’s hyperscale and AI infrastructure ecosystem is rapidly expanding. More than 300 MW of data centre capacity is already operational, while another 2 GW is currently under development across the state.
The government’s longer-term target of 5 GW by 2029 reflects the growing demand for high-performance computing infrastructure driven by cloud services, artificial intelligence, enterprise digitisation and data-intensive applications.
“Telangana is building one of India’s most advanced technology clusters,” Sridhar Babu said, highlighting the growing investments in hyperscale and AI infrastructure alongside the expansion of global innovation centres and Global Capability Centres (GCCs).
The proposed $30 billion investment opportunity could further support the development of data centres, power infrastructure, connectivity, cloud platforms and related technology ecosystems across the state.
Microsoft Expands AI and Cloud Infrastructure
Microsoft’s India South Central datacenter region marks another significant addition to Telangana’s digital infrastructure landscape. The company is expanding its presence at a time when demand for cloud computing and AI capabilities is accelerating across enterprises and public-sector organisations.
The development is also expected to strengthen Telangana’s position as an investment destination for technology companies, hyperscalers and organisations looking to establish large-scale digital infrastructure.
With 2 GW of additional capacity under development, the state is already building a substantial pipeline beyond its existing operational infrastructure.
Focus on Sustainable Data Centre Infrastructure
Alongside capacity expansion, water and power consumption remain important considerations for large-scale data centres. Microsoft said its India South Central region operates with effectively zero water use for cooling, while the company is also working with local partners on groundwater recharge, rainwater harvesting and watershed resilience.
Microsoft’s environmental initiatives in the region include the Elikatta groundwater-recharge programme, which had added approximately 5 million litres of recharge capacity by June 2026.
The company also said its community initiatives around the Hyderabad datacenter region have reached more than 22,400 people, covering areas such as livelihoods, skills development, governance and environmental sustainability.
Hyderabad Strengthens Its Digital Infrastructure Position
The combination of hyperscale data centres, AI infrastructure, GCC expansion and technology investments is reshaping Hyderabad’s position within India’s digital economy.
Telangana’s 5 GW target by 2029 represents a major scale-up from the state’s current operational capacity. If the investment pipeline progresses as planned, the expansion could create additional opportunities across data centre construction, power management, cooling technologies, networking, cybersecurity, cloud services and IT infrastructure.
With Microsoft’s latest datacenter region now operational and additional hyperscale capacity under development, Telangana is positioning data centres and AI infrastructure as key pillars of its next phase of technology-led growth.
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