In a strategic move aimed at enhancing user experience and bolstering its presence in one of its largest markets, Meta, the social media conglomerate, is reportedly gearing up to establish its inaugural data center in India. According to sources familiar with the matter, the data center will be set up at the Reliance Industries campus in Chennai, marking a significant milestone for both companies.

The decision to establish a local data center comes on the heels of discussions between Meta and Reliance Industries during the pre-wedding festivities of Anant Ambani, scion of the Ambani family, in early March. Mark Zuckerberg, the CEO of Meta, led the discussions, paving the way for a strategic partnership between the two entities.

The data center, set to be situated within Chennai's Ambattur Industrial Estate, will cover a sprawling 10-acre campus and is a collaborative effort between Brookfield Asset Management, Reliance Industries, and Digital Realty. With a capacity to accommodate up to 100-megawatt (MW) IT load, experts speculate that Meta might leverage the facility for local operation of large artificial intelligence (AI) models, especially amidst increasing government oversight.

Meta's decision to expand its operations with four to five nodes across various locations in India underscores its commitment to improving content delivery and enhancing user experience. Presently, data from Indian users of Meta's platforms is managed at its data center in Singapore. The establishment of a local data center is poised to streamline data processing, facilitate localized advertisements, and reduce transmission costs from global data hubs.

Neil Shah, a partner at technology research firm Counterpoint Research, emphasized Meta's focus on greenfield data centers across key regions including Chennai, Mumbai, Hyderabad, and Delhi NCR, to meet its robust infrastructure requirements. This move aligns with Meta's goal to localize user-generated content and ads, thereby reducing latency, enhancing AI-driven recommendations, and optimizing transmission costs.

India boasts a staggering user base for Meta's platforms, with 314.6 million users on Facebook, 350 million on Instagram, and 480 million on WhatsApp. The country's burgeoning smartphone user base, close to 850 million, presents immense growth opportunities for Meta. Revenue from click-to-message ads in India doubled in the September 2023 quarter, reflecting the market's potential for Meta's advertising solutions.

Furthermore, Meta's Llama series, an open-source collection of large language models, serves as a cornerstone for numerous Indian enterprises, enabling application development and model refinement on proprietary data. The establishment of local data centers is expected to further catalyze innovation and drive economic growth within the Indian tech ecosystem.

India's data center industry is poised for exponential growth, with projections indicating a doubling of capacity within the next three years. Despite currently holding only a 3% share of global data center capacity, India's prominence in the digital landscape is set to rise as major tech companies like Meta and Google express intentions to localize data storage within the country.