Karnataka Bets on Greener Data Centres as AI Demand Reshapes Digital Infrastructure
September 22, 2026
Karnataka is doubling down on its digital future with a major push for sustainable, AI-ready data infrastructure. The state cabinet has officially greenlit the Data Centre Policy 2026–31, setting an ambitious target of 1 GW of cumulative data centre capacity by the end of the decade.
Backed by a proposed outlay of ₹1,300.45 crore, the framework aims to capture a 10–12% share of India’s rapidly expanding AI-ready data centre ecosystem. Crucially, the policy marks a departure from traditional real-estate-heavy models, pivoting heavily toward green energy, resource efficiency, and decentralized growth.
The policy rollout comes at a critical juncture for India’s digital economy. Driven by the explosive adoption of artificial intelligence, high-density computing infrastructure requires unprecedented levels of power and cooling capacity.
With India’s installed data-centre power capacity crossing 1.57 GW, surging AI workloads—which demand dense clusters of GPUs and high-speed networking—are pushing electricity availability to the forefront of national infrastructure planning.
To future-proof operations, Karnataka’s framework introduces sustainability-linked incentives encouraging operators to adopt:
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Renewable power procurement and grid-connected green energy
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Battery energy storage systems (BESS) to manage variable supply
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Advanced energy-efficient cooling and strict Power/Water Usage Effectiveness monitoring
While Bengaluru remains a cornerstone of the state’s tech ecosystem, the new policy actively decentralizes growth to match available resources.
Through resource heat mapping, the government will identify optimal locations based on local land, water, and electricity availability. Emerging tech corridors and Sustainable Data Centre Zones are slated for regional hubs like Mysuru and Mangaluru—the latter bolstered by strategic connectivity tied to future cable-landing infrastructure.
State officials emphasize that data centres are evolving from conventional tech assets into massive energy consumers. By intertwining digital expansion with firm renewable-energy solutions, Karnataka’s policy creates a template for how the energy transition and the digital economy can scale together.
As India’s AI landscape scales up, the state’s strategy suggests that the next generation of computing will rely just as heavily on advanced green-energy grids as it will on silicon chips.
