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Reliance Bets Big on AI: $110 Billion Investment Planned
23 Feb
Summary
- Reliance Industries Ltd plans a massive $110 billion investment in AI.
- The investment will span data centers, renewable energy, and AI chips.
- New AI business could yield over 12% post-tax return on capital.
Reliance Industries Ltd (RIL) has announced a significant strategic shift, earmarking USD 110 billion for investment in artificial intelligence over the next seven years. This move signals a new era for the conglomerate, following previous decades focused on evolving its business models.
The substantial investment will fund the development of multi-gigawatt data centers, 10 GW of renewable energy infrastructure, energy storage systems, and AI chip advancements. This initiative aims to replicate RIL's success in making mobile and internet services accessible across India, now focusing on the AI domain.
Analysts suggest RIL will adopt a partnership-led strategy, potentially leveraging collaborations with companies like Meta Platforms and Google to manage capital outlay. Projections indicate the new intelligence business could achieve a post-tax return on capital employed (ROCE) exceeding 12%, significantly outperforming its past investments in telecom and consumer sectors.
With an estimated annual operating cash flow of USD 14-15 billion, RIL may require asset monetization to support this massive expenditure. The company is slated to commission 120 MW of AI infrastructure capacity in the latter half of FY26, with investments expected to scale up over five years, indicating a back-loaded investment cycle.
