State plans to set up govt-run cloud exchange hub to position Tamil Nadu at forefront of AI

CHENNAI: Tamil Nadu is planning to establish a government-run cloud exchange hub, aiming to position the state at the forefront of artificial intelligence (AI) and digital innovation.
The initiative, part of broader efforts to expand Chennai's data centre ecosystem, is expected to support research, analytics, and technological advancements.
Speaking at the 7th ASSOCHAM Conclave on 'Smart Datacenters & Cloud Infrastructure', Palanivel Thiaga Rajan, the state's Minister for Information Technology and Digital Services, said that if Chennai captures a significant share of India's growing data infrastructure market, it could provide a 'strong foundation for the AI industry'.
Chennai's data centre capacity is projected to increase from 202.43 MW in 2025 to 551.15 MW by 2030, with a compound annual growth rate of 22.18%, according to PwC. The city's strategic coastal location, infrastructure, and government policies are driving investment.
The Tamil Nadu Data Centre Policy 2021 has played a key role, offering tax breaks, land subsidies, and power tariff concessions to attract developers. These measures, Rajan said, are laying the groundwork for both digital infrastructure and broader economic transformation.
PwC's report calls for further policy enhancements, including incentives for sustainable and energy-efficient data centres, expanded renewable energy support, and clear public-private partnership (PPP) guidelines. It also recommends streamlined regulatory processes and training programmes to develop a skilled workforce for the sector.
With the adoption of hybrid and multi-cloud strategies rising across enterprises, demand for scalable data infrastructure is growing. The spread of AI and big data analytics is also driving increased investment in high-capacity, energy-efficient facilities, the PwC report said.
Beyond Chennai, other cities such as Coimbatore and Madurai are also poised to benefit. The PwC report said Coimbatore's strong industrial base and educational ecosystem alongside Madurai's growing IT workforce make them attractive locations for data infrastructure growth. With supportive policies, a skilled workforce, and accelerating investment, TN is positioned to become a national leader in digital infrastructure, paving the way for AI-led innovation.

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