Reliance to invest around $15B in AI infrastructure: Report
What's the story
Reliance Industries, led by billionaire Mukesh Ambani, is set to invest between $12 billion and $15 billion in artificial intelligence (AI) infrastructure over the next few years. The investment will likely include a major 1GW data center, according to a report by Morgan Stanley. The move comes after Ambani announced a major push into AI at the company's annual shareholder meeting in August.
Strategic move
AI strategy focuses on infrastructure, partnerships, services, and talent
Reliance Industries has formed a new wholly-owned subsidiary, Reliance Intelligence, to lead its AI initiatives. The company's strategy will focus on four key areas: infrastructure, partnerships, services, and talent. This includes building gigawatt-scale data centers ready for AI workloads and collaborating with global tech leaders to bring advanced AI solutions to India. The company also plans to develop AI-powered services for Indian consumers and businesses in sectors like education and healthcare.
Business transformation
Investment in generative AI to transform Reliance's business model
Morgan Stanley's report highlights that Reliance's foray into AI could transform its business model. The investment in generative AI will allow large-scale capital deployment and create value across energy, digital, consumer, and media sectors. The company plans to fund about 25% of the capacity itself, with an estimated $7 billion for data center infrastructure and another $5 billion for deploying chips directly.
Capacity expansion
Datacenter as a Service
The remaining capacity of the 1GW data center will be leased to hyperscalers and LLM providers as 'Datacenter as a Service.' The first phase of this facility is already under construction in Jamnagar, Gujarat. Reliance plans to use its initial 100MW of Gen AI datacenter capacity over two years to meet enterprise demand, leveraging its joint venture with Meta on small language models and partnerships with Google and Azure.
Joint venture
Joint venture with Meta for enterprise AI services
Reliance recently announced a dedicated AI joint venture with Facebook Overseas Inc, a subsidiary of Meta. The new entity, Reliance Enterprise Intelligence Ltd (REIL), will leverage Meta's open-source Llama AI models and Reliance's business network to develop and deliver enterprise AI services for Indian companies. The partners have committed an initial investment of ₹855 crore in the venture.