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Applied Materials, which has a global market capitalisation of $343 billion, has advocated modernising India’s power grid to help drive the country’s AI dream, underscoring the intricate linkages and dependencies across multiple domains and utilities crucial to acing the technology that's now grabbing 80% of investments globally.
"It becomes very complex as to which utility, which government, in which region actually owns the grid. Due to that complexity, it has fallen behind,” Sundeep Bajikar, vice president, corporate strategy, told ET. “Promoting investment in the grid will accelerate its modernisation. This is a global problem."
Applied Materials is among the global leaders supplying equipment and software to chipmakers.
In a joint report with industry body AMCHAM India, seen by ET, the company has pointed out strong regional variation in the cleanliness of India's electricity grid, and suggested incentives for fabs and data centres to locate near clean power. Conversely, it also wants the government to seriously consider setting small modular reactors near these facilities to provide steady baseload power.
It has also called for AI infrastructure to be planned and executed as a connected national system. This includes planning for semiconductor design and manufacturing, compute deployment, research and innovation, and power generation and delivery, in tandem.
Amcham also wants disparate ministries such as Electronics and IT, Renewable Energy, Petroleum and Natural Gas, Industries, and Power to establish a joint dedicated task force assessing the energy requirement for the AI and semiconductor sector, Pranav Mishra, director at AMCHAM India told ET.
Bajikar said there remain significant opportunities for India in becoming a key node in the global supply chain for semiconductor equipment.
"For that, any kind of encouragement, support, incentive, or capital risk reduction for local companies by the government will be helpful," he stressed. Employing 8,000 employees in India, the company expects materials engineering to open opportunities for the country, he added.
Gridlocked AI
Arguing the demanding nature of AI workloads, the report pushes for an electricity grid built on abundant, clean, and reliable power delivered at the moments and places AI needs it. While non-fossil capacity exceeded 52% of installed capacity in India's electricity grid as of January 2026, India’s grid emission factor stood at a high 748 grams of carbon dioxide equivalent per kilowatt-hour (g CO₂/kWh), reflecting continued coal dependence for baseload generation, it said.
India's data centre capacity stood at 1500 MW by 2025-end, while electricity demand from data centres is estimated to reach 13.56 GW over the next five years, according to official estimates.
Globally, data centre electricity demand is projected to exceed 1,000 terawatt-hours by 2027, driven primarily by the growth of AI workloads, according to the International Energy Agency.
"It becomes very complex as to which utility, which government, in which region actually owns the grid. Due to that complexity, it has fallen behind,” Sundeep Bajikar, vice president, corporate strategy, told ET. “Promoting investment in the grid will accelerate its modernisation. This is a global problem."
Applied Materials is among the global leaders supplying equipment and software to chipmakers.
In a joint report with industry body AMCHAM India, seen by ET, the company has pointed out strong regional variation in the cleanliness of India's electricity grid, and suggested incentives for fabs and data centres to locate near clean power. Conversely, it also wants the government to seriously consider setting small modular reactors near these facilities to provide steady baseload power.
It has also called for AI infrastructure to be planned and executed as a connected national system. This includes planning for semiconductor design and manufacturing, compute deployment, research and innovation, and power generation and delivery, in tandem.
Amcham also wants disparate ministries such as Electronics and IT, Renewable Energy, Petroleum and Natural Gas, Industries, and Power to establish a joint dedicated task force assessing the energy requirement for the AI and semiconductor sector, Pranav Mishra, director at AMCHAM India told ET.
Bajikar said there remain significant opportunities for India in becoming a key node in the global supply chain for semiconductor equipment.
"For that, any kind of encouragement, support, incentive, or capital risk reduction for local companies by the government will be helpful," he stressed. Employing 8,000 employees in India, the company expects materials engineering to open opportunities for the country, he added.
Gridlocked AI
Arguing the demanding nature of AI workloads, the report pushes for an electricity grid built on abundant, clean, and reliable power delivered at the moments and places AI needs it. While non-fossil capacity exceeded 52% of installed capacity in India's electricity grid as of January 2026, India’s grid emission factor stood at a high 748 grams of carbon dioxide equivalent per kilowatt-hour (g CO₂/kWh), reflecting continued coal dependence for baseload generation, it said.
India's data centre capacity stood at 1500 MW by 2025-end, while electricity demand from data centres is estimated to reach 13.56 GW over the next five years, according to official estimates.
Globally, data centre electricity demand is projected to exceed 1,000 terawatt-hours by 2027, driven primarily by the growth of AI workloads, according to the International Energy Agency.
