off prem
Small start at $37M, maybe 50MW, but full-stack service plan expected to be successful
Indian technology services giant and retro software house HCL has decided to enter the AI data center business.
The company revealed its plans in an announcement yesterday. [PDF] The announcement was made alongside the company’s first quarter results, which included news that sales rose 3% year over year to $3.65 billion and net income rose 20% to $488 million.
CEO C. Vijayakumar also pointed out that HCL saw a 62% year-over-year increase in revenue in a segment it calls “Advanced AI,” which includes building its own AI platform.
The CEO said HCL’s strategy is to “profit disproportionately from AI native and AI amplification opportunities.” Because they are “the fastest growing pool of corporate spending.”
So the company decided to get into the data center business, finding itself spending 3.5 billion rupees ($36.5 million) on a facility that it said “has the potential to expand to 50 MW of capacity.”
Although this will not be a large-scale facility, with just one of Meta’s data centers hosting 50GW of kit, HCL said it can increase its relevance by providing a “full stack” infrastructure using existing software.
“The biggest opportunity is not to rent AI, but to own the full stack,” the CEO said. “A data center that computes models built to address the unique needs of our clients.”
“This is a business that is moving away from physical infrastructure to higher-value AI-enabled solutions,” he added. “We will combine our capabilities across AI data center design, DevOps, and cloud operations and our software portfolio with our new data center business to create a full-stack offering.”
HCL appears to be focused on Indian customers, with the data center investment “positioning us as a key enabler of India’s sovereign AI ecosystem and expanding our presence in the fastest growing market in the economic powerhouse with differentiated services centered around sovereign cloud, secure AI, and managed AI infrastructure,” Vijayakumar said.
The CEO said HCL was already in “high-level discussions with our customers to ensure that we can start with a certain level of committed consumption from day one.”
The company did not say where Bitburn would be built, when it would be operational or how it would secure its energy supply, an important consideration given that it reported yesterday about its efforts to set up a data center to serve Indian customers in renewable energy-rich Bhutan.
Mr. Vijayakumar also revealed that HCL posted new business of $2.4 billion in the quarter. This is a record. The CEO cited one of these deals as an example of HCL’s AI smarts, saying the services company will be working with a Fortune 250 semiconductor equipment OEM to “accelerate AI-driven transformation across the semiconductor engineering and manufacturing value stream.” To achieve that, HCL will implement SAP and integrate it with existing systems to establish an “enterprise backbone for a future-ready, scalable, AI-driven digital supply chain.”
In another new deal, which was closed earlier this month and is therefore not included in the $2.4 billion in new deals won in the quarter ended June 30, HCL will work as a technology partner with an unidentified “Fortune Global 50 company headquartered in Europe” to accelerate AI-driven transformation and management of digital workplaces and enterprise networks.
A number of reports in the Indian media have identified the new customer as Mercedes-Benz and suggested that HCL has transferred operations from Infosys, where the auto giant will report its quarterly results next week. ®
