Synopsis: Artificial Intelligence is emerging as one of the biggest investment themes globally, with AI-related spending expected to exceed $1 trillion annually over the next decade. While software companies are expected to benefit, major opportunities may also emerge in sectors such as power, data centers, telecom infrastructure, electrical equipment and digital services that support the AI ecosystem.
Artificial Intelligence (AI) is rapidly transforming industries across the globe, prompting technology giants such as Microsoft, Amazon, Alphabet, Meta and OpenAI to invest hundreds of billions of dollars in AI infrastructure. Industry estimates suggest the global AI market could grow at a CAGR of over 35 percent and surpass $1 trillion in annual spending over the coming decade.
While AI applications such as ChatGPT attract most of the attention, the technology requires enormous amounts of computing power, electricity, storage, connectivity, and cooling infrastructure. As a result, the next phase of AI growth could benefit not only software companies but also businesses operating across infrastructure-related sectors.
Data centers and power companies
Data centers form the backbone of AI operations, with every AI query requiring powerful processors and storage systems. India’s data center market is expected to grow from around $6-7 billion currently to over $10 billion by 2030. Companies such as Reliance Industries and Bharti Airtel could benefit from increasing demand for cloud services and AI workloads.
AI also consumes significant amounts of electricity, creating opportunities for power generation companies such as NTPC, Tata Power, JSW Energy, Adani Power and Torrent Power. NTPC, with more than 80 GW of installed capacity, is particularly well-positioned to benefit from rising demand from digital infrastructure.
Telecom and transmission companies may gain
As AI workloads require real-time transfer of massive volumes of data, companies such as Tata Communications, Bharti Airtel, and Reliance Jio could benefit from rising demand for fiber connectivity and enterprise networking services.
Meanwhile, transmission companies, including Power Grid Corporation of India and Adani Energy Solutions, may see increased investments as stronger grid infrastructure becomes necessary to support growing data center capacity.
Which IT companies are best positioned?
AI infrastructure companies are also gaining prominence. Netweb Technologies is one of India’s leading providers of high-performance computing (HPC) systems, AI servers, and data center solutions, making it a direct beneficiary of rising AI computing demand. Black Box Limited specializes in digital infrastructure, networking, and data center connectivity solutions, positioning it to benefit from increasing investments in AI-enabled enterprise infrastructure. E2E Networks provides cloud and GPU computing infrastructure, allowing businesses to train and deploy AI models without investing in expensive hardware.
Among IT companies, Persistent Systems, Tata Elxsi, and Happiest Minds Technologies have emerged as notable AI-focused players, benefiting from growing demand for cloud migration, digital engineering, and AI implementation services. Persistent Systems is strengthening its position in enterprise AI and digital transformation, while Tata Elxsi is leveraging AI across automotive, healthcare, and embedded engineering applications. Happiest Minds continues to gain traction in Generative AI, cybersecurity, and digital modernization projects.
Large-cap IT companies such as TCS and Infosys are also investing aggressively in AI. TCS recently reported AI-related business with annualized revenues exceeding $2 billion, while Infosys continues expanding its AI capabilities through its Topaz platform, helping global enterprises accelerate AI adoption and business transformation.
Hidden beneficiaries: Electrical equipment and HVAC
Every AI data center requires transformers, switchgear, power management systems and cooling infrastructure. Companies such as Siemens India, ABB India, CG Power and Hitachi Energy India could benefit from rising investments in digital infrastructure. Similarly, HVAC players such as Voltas and Blue Star may see increased demand for precision cooling systems required for AI data centers.
While AI is often viewed as a software opportunity, the larger investment theme may lie in the infrastructure supporting it. Power generation, data centers, telecom infrastructure, electrical equipment and AI-focused IT services could emerge as some of the biggest beneficiaries of the AI boom.
Companies such as NTPC, Tata Power, Power Grid, Tata Communications, Bharti Airtel, Persistent Systems, Tata Elxsi, Siemens India and ABB India are among the businesses investors may closely watch as AI adoption accelerates globally.
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