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Karnataka all set to corner data centre projects worth Rs 1,350 crore

Datasamudra, the data centre division of Teleindia Datacenter, plans to invest Rs 300-500 crore over the next few years to expand its footprint outside Bengaluru, according to people familiar with the matter.
The company will set up a 35-40 MW artificial intelligence (AI)-driven data centre in Mangaluru and smaller 5 MW edge centres in Mysuru and Hubballi-Dharwad, they said.
Similarly, Bengaluru-based power electronics firm Elmeasure plans to invest Rs 800-850 crore to manufacture data centre electrical components in Karnataka.
These plans are of a piece with other investments in the state's data centre ecosystem. Japanese operator NTT recently pumped in Rs 2,400 crore to expand its Bengaluru campus. The new investments are aimed at meeting the power and resilience demands of AI-era hyperscale facilities, where rack power densities have shot up to 80-100 kW.
They also indicate that amid India's cloud and AI infrastructure push, Karnataka's private and public initiatives are converging around Mangaluru, Mysuru and Hubballi-Dharwad, which are emerging as the new data centre and component manufacturing hubs beyond Bengaluru.
“Our plan is to establish a 35-40 MW AI-driven data centre in Mangaluru over the next three to four years,” Balaji Rajagopal, chief operating officer and principal advisor, Datasamudra, told ET. “Datasamudra is in talks with a UK-based partner for AI modelling and infrastructure collaboration. The company aims to help hyperscalers, startups and MSMEs (micro, small and medium enterprises) meet surging compliance and processing needs once the Digital Personal Data Protection (DPDP) Act is fully implemented.”
Rajagopal said Karnataka's evolving digital economy and regulatory imperatives will make local data processing indispensable. “Within 12-18 months, as DPDP implementation deepens, domestic storage and processing demand will rise sharply. We want to ensure that growth extends beyond Bengaluru,” he said.
Nethaji Rajendran, global vice president for strategic partnerships (data centre), Elmeasure, said, “Everything from the grid to the chip is being rethought. A typical AI centre is like putting a giant motor in a small socket; legacy power systems cannot keep up."
The company plans two new manufacturing plants, one at Bengaluru's KIADB Hardware Park and another at Chamarajanagar, along with a centre of excellence in Bengaluru that will design ultra-fast semiconductor-based transfer switches. The technology enables power source transfers in under two milliseconds, compared with the traditional 5-8 seconds, using chip-based switching instead of mechanical parts.
“We believe the manufacturing backbone for critical power infrastructure will sit in Karnataka,” Rajendran said, pointing to the state's power reliability, port access, and deep AI talent pool.
Elmeasure is also scouting future sites in Hubballi-Dharwad and Mangaluru, eyeing exports to West Asia and growing coastal logistics relevance.
State officials say these private investments align neatly with Karnataka's own ambitions. The Karnataka Digital Economy Mission (KDEM) is positioning Mangaluru as a 1 GW “cable-to-cloud” data centre cluster, backed by a Deloitte feasibility study that highlights cost advantages in land, power and cooling.
“Mangaluru offers clear cost and efficiency gains, land lease at Rs 7.7 per sq ft compared to Rs 15–39 in other metros, power reliability above 98% and 10-15% cooling savings due to its coastal climate,” said Sanjeev Kumar Gupta, chief executive, KDEM. “We're targeting 20-30% of India's total future data centre capacity via the Bengaluru-Mangaluru corridor.”
According to Gupta, Karnataka's 12,000 IT and ITeS firms, 875 global capability centres (GCCs) and growing AI initiatives create a natural base for such expansion. He said the state is engaging with global hyperscalers and domestic operators for 600 MW-1 GW projects in Mangaluru and Bengaluru.
KDEM plans to get the Karnataka Data Centre Policy (2022–27) updated with new incentives, including plug-and-play parks, 25% capex support for submarine cable projects and one-window clearance for investors. “The aim is a 5 GW-ready ecosystem anchored by Mangaluru's coastal advantage and Bengaluru's engineering depth,” Gupta said.
As hyperscalers accelerate build-outs and domestic firms such as Datasamudra and Elmeasure localise both digital and hardware layers, Karnataka is trying to position itself as a dual hub: a manufacturing base for AI data centre components and a coastal gateway for India's next wave of digital infrastructure.
Source: EconomicTimes
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