Canada's largest pension fund is betting big that India will be the next global hub for AI and cloud computing — to the tune of $741 million.
CPP Investments announced Wednesday it'll invest ₹40 billion (about $423 million) to buy an 8.2% stake in CtrlS, one of India's biggest data center operators. On top of that, it's committing up to ₹30 billion (roughly $317 million) to a joint venture that'll build hyperscale data center campuses across India.
Hyperscale data centers are the massive facilities that power cloud computing and artificial intelligence. Think the kind of server farms that run Google searches, Netflix streams, or ChatGPT responses. CtrlS operates 15 data centers across India, including in Mumbai, Hyderabad, Chennai, and Bangalore.
The investment comes as global tech giants and investors race to build the physical infrastructure needed for the AI boom. India's data center market is projected to grow from about $7.5 billion in 2024 to over $20 billion by 2030, according to industry estimates.
CtrlS was founded in 2007 by Sridhar Pinnapureddy, who still serves as the company's chairman. The company claims to be Asia's largest rated data center operator. That means its facilities meet strict standards for reliability and security. It also runs cloud services and disaster recovery solutions for clients that include banks, telecoms, and government agencies.
For CPP Investments, which manages over $600 billion in assets for Canada's pension system, this is its first direct investment in Indian data infrastructure. The fund has been expanding its Asia footprint, with existing holdings in Indian renewable energy and logistics.
The joint venture between CPP Investments and CtrlS will focus on building new hyperscale campuses in multiple Indian cities. The exact locations haven't been disclosed, but industry watchers expect them to target Tier-1 cities where demand is highest.
India's data center boom is fueled by several factors: the government's push for local data storage, the rapid growth of digital payments and e-commerce, and global companies looking to diversify their server locations beyond China and Southeast Asia.
But the sector faces challenges too. Power supply remains unreliable in parts of India, and data centers are massive electricity consumers. Land acquisition can be slow, and water for cooling is a growing concern in drought-prone regions. CtrlS has been investing in green energy and water recycling to address these issues.
For now, the money is flowing. CPP Investments joins other global pension funds and private equity firms — like Brookfield and Blackstone — that have poured billions into Indian data centers over the past two years.
The deal is expected to close in the coming months, pending regulatory approvals.