Mark Zuckerberg has promised to invest billions of dollars in AI infrastructure, leaving people skeptical about how his social-media empire will monetize the sector. Now we have a concrete answer to this. Meta Platforms Inc. Converting high-cost investments into new sources of income.
Bloomberg News last week, citing people with knowledge of the matter, reported that under an internal initiative called “Meta Compute,” the company plans to rent out its excess capacity to large business clients. It remains to be seen what impact Microsoft Corp., Alphabet Inc. will have on the cloud business. And Amazon.com Inc. How much can it challenge the dominance of But it is important to keep an eye on India to see where its initial movements will be felt.
Zuckerberg’s entry into the cloud-capacity business is going to completely change the nature of the ongoing tough competition between two of Asia’s richest industrialists, Mukesh Ambani and Gautam Adani. Until recently, it seemed that Adani was leading the race for AI infrastructure in India.
They were rapidly building hyperscale servers and had also secured an important partnership with Google to provide infrastructure. For a billionaire who specializes in port, airport and power grid businesses, getting into the concrete and cooling systems business of data centers seemed like a natural step.
But these plans seem to be in conflict with Ambani’s ambitions. If digital real estate is a clear focus for Adani’s expansion of his infrastructure empire, then for Ambani’s parent company Reliance Industries Ltd, AI is equally important for individual and corporate customers.
The group wants to bring its 10-year-old telecom and media unit, Jio Platforms Limited, to the public market from a technology perspective. The special thing is that Meta had bought 9.99 percent stake in it in 2020.
How is meta AI intensifying the war?
Neither Ambani nor Adani has any presence in software outsourcing. And this is a good thing for them. With the advent of Generative AI, the entire mathematics of India’s number 1 service export has changed.
The country is no longer defined by its technically skilled, English-speaking youth who are willing to work for much lower wages than Western programmers. Now the advantage is to those capitalists who are using solar and wind power to create AI tokens cheaply.
The software hub of Bengaluru in the south is where Meta engineers are making their own silicon, while Gujarat on the west coast is leading the way in generating electricity for token factories. It is here that Adani has set up the world’s largest single-location clean-energy project under the $100 billion AI Compute Project.
Now Ambani is raising the stakes with a 5,50,000-acre facility, three times the size of Singapore. The group claims that upon completion, it will be one of the cheapest sources of 24/7 green power worldwide.
A customer has already come for this energy. Last month, Ambani announced a partnership with Meta to build a 168-MW data center in Jamnagar, Gujarat. On paper, it looks like a typical infrastructure lease.
Big challenge for both
Adani remains a strong player, especially because of its strategic partnership with Google. Apart from solar and wind energy, this big industrialist also has big plans for nuclear power. This is a sector which earlier had a monopoly of the government, but recently it has been opened to the private sector. This could prove to be another weapon for them to reduce the cost of tokens that provide uninterrupted baseload electricity required to run AI queries around the clock.
Nevertheless, the Meta-Reliance partnership has increased the level of competition. For Zuckerberg, India is a great laboratory to prove that meta can succeed in the enterprise cloud. And for Ambani, this is further proof that on the platform of Indian capitalism, his mastery of coalition building makes him a key player.
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