(Image source from: Bloomberg)
Billionaire Mukesh Ambani's Reliance Industries Ltd is likely to invest roughly 12 to 15 billion dollars in the coming years on AI infrastructure, which might involve a massive 1GW data center, according to a Morgan Stanley report. Ambani revealed at the company's yearly shareholder gathering in August that they would be making a significant move into AI through a new subsidiary and strategic partnerships. A new fully-owned subsidiary, Reliance Intelligence, will lead the company’s AI efforts, focusing on four main areas: Infrastructure (building large-scale, AI-capable data centers), Partnerships (teaming up with global tech companies to introduce advanced AI solutions in India), Services (creating AI-driven services designed for Indian customers, small businesses, and sectors like education, healthcare, and farming), and Talent (investing in skill development and training for India's AI workforce). Morgan Stanley stated in the report that Reliance has adapted its business model every ten years, and AI is expected to transform its investment story.
The application of Generative AI allows for large investments while creating value through combined benefits across sectors like energy, digital, consumer goods, and media. The report indicates that Reliance will spend around 12 to 15 billion dollars on AI infrastructure for a 1GW data center, contributing about 25 percent of the capacity on its own (about 7 billion dollars for data center infrastructure and 5 billion dollars for the 250MW of chips the company will directly use). The remaining capacity is expected to be rented out to large-scale tech companies and LLM providers as a 'Data Center as a Service'. The initial phase of the data center is already being developed in Jamnagar, Gujarat.
The report also mentions that Reliance anticipates using its first 100MW of Generative AI data center capacity—which it plans to expand over the next two years—to meet demand for inference from businesses, as part of its enterprise services and Sovereign AI projects. This effort will build on its partnership with Meta for small language models, along with collaborations with Google and Azure. On Saturday, Reliance announced a focused AI joint venture with Meta's subsidiary, Facebook Overseas, Inc, called Reliance Enterprise Intelligence Ltd (REIL). The partners have pledged an initial funding of Rs 855 crore, with Reliance Intelligence owning 70 percent and Facebook Overseas 30 percent.
This partnership will merge Meta's open-source Llama AI models with Reliance's business framework to develop and distribute AI services for Indian businesses. Additionally, Reliance is working with Google to create a special cloud area in Jamnagar, combining Reliance's infrastructure with Google's AI and cloud services. Morgan Stanley projected a Return on Capital Employed (ROCE) of about 11 percent on the initial AI spending. For the 'Data Center as a Service', they estimated yearly incomes of approximately 1.5 to 1.6 million dollars per MW. The report noted that since data centers consume a lot of energy, Reliance could also manage over 20GW of their own power needs, supporting 100GW of their solar panel production and 30-40GWh of their battery storage capacity.
