Canadian pension giant joins race to fund India’s AI-fueled data center boom

As global investors race to fund the infrastructure underpinning the artificial-intelligence boom, Canada Pension Plan Investment Board’s CPP Investments has committed up to ₹70 billion (about $741 million) to Indian data center operator CtrlS, betting on India’s growing role in the global buildout of cloud and AI infrastructure.

Under the partnership announced on Wednesday, CPP Investments will invest ₹40 billion (around $423 million) to acquire an 8.2% stake in CtrlS and commit up to ₹30 billion (about $317 million) to a joint venture to develop hyperscale data center campuses across India.

CPP Investments will own 48% of the joint venture, while CtrlS will hold the remaining 52%, the companies said in a joint statement.

Founded in 2007, CtrlS operates more than 15 data centers across India. The Hyderabad-based company has been expanding its footprint to meet rising demand from cloud providers, enterprises, and AI workloads.

India has become a major destination for data center and AI investments as global technology companies and investors ramp up spending to meet surging computing demand. Companies including Amazon, Google, Microsoft, OpenAI, and Uber have announced investments in the country in recent months, while operators are rapidly expanding capacity amid a broader global race to build AI infrastructure.

“As one of the world’s fastest-growing digital markets, India represents an important pillar of our global data center strategy,” said CPP Investments’ global head of real assets Max Biagosch in a statement.

CPP Investments, Canada’s largest pension investor, has been investing in India since 2009 and had net assets of about $20 billion in the country as of March 31, making it one of the largest foreign institutional investors in the market.

The investment builds on CPP Investments’ broader push into digital infrastructure. The pension fund said it has invested in the data center sector since 2017 and has built a portfolio of assets and joint ventures across major markets worldwide.

The partnership will help CtrlS expand capacity and build infrastructure tailored for AI workloads, said CtrlS founder and chief executive Sridhar Pinnapureddy.

The CPP-CtrlS deal is the latest in a string of investments targeting India’s data center sector. Earlier this month, Blackstone-backed AirTrunk said it would invest $30 billion to build five gigawatts of data center capacity in India by 2030. Meta, meanwhile, partnered with Reliance Industries last week on a 168-megawatt AI-enabled data center in the western state of Gujarat.

New Delhi has sought to position India as a global hub for digital infrastructure through a range of policy measures, including tax exemptions for foreign cloud providers on services sold overseas through 2047, provided those workloads are run from data centers located in the country.

Indian conglomerates have also accelerated expansion plans to capitalize on the opportunity. Adani Group and Tata Consultancy Services are among the companies that have unveiled major data center projects aimed at supporting AI and cloud workloads. In 2023, CtrlS announced plans to invest $2 billion over six years to expand its data center footprint across India.

India’s growing role in AI infrastructure has not yet been matched by similar progress in developing frontier AI models. While the country has a handful of startups building indigenous AI models, including Sarvam, much of the underlying AI technology used by Indian companies continues to be supplied by U.S. firms.

The rapid buildout of data centers is also expected to increase pressure on electricity and water resources, highlighting some of the challenges that could accompany India’s ambitions to become a major AI infrastructure hub.