India’s Power Industry Set to Gain Most from Global AI Expansion, Says Shriram Mutual Fund Report

New Delhi, July 11, 2026;

India AI power sector could emerge as the country’s biggest beneficiary of the global artificial intelligence boom, according to a new report by Shriram Mutual Fund. The study says India’s strongest opportunity lies in supplying electricity and infrastructure needed for AI-powered data centres rather than developing advanced AI models.

India’s biggest advantage in the rapidly expanding artificial intelligence (AI) ecosystem may come from strengthening its power infrastructure rather than competing in the development of advanced AI models, according to a thematic study released by Shriram Mutual Fund.

The report, titled The AI Bubble Debate: A Unit-Economics Lens, states that the next phase of AI-led growth will require enormous amounts of electricity and supporting infrastructure, creating long-term opportunities for India’s power and electrical equipment industries.

According to the analysis, India currently has limited participation in the global AI development race because it lacks publicly listed frontier AI companies and hyperscale cloud providers. However, the country is well positioned to benefit by supplying the infrastructure needed to operate large-scale AI data centres.

The fund house believes companies involved in electricity generation, power transmission, engineering services, power financing, diesel generator manufacturing, and the wires and cables segment are likely to witness sustained demand as AI infrastructure expands across the world.

The report further highlights that businesses manufacturing transformers, switchgear, transmission equipment, cooling systems, and electrical cabling are expected to play a crucial role in supporting AI-powered data centres. These industries could continue to benefit irrespective of which technology company emerges as the global AI leader.

Shriram Mutual Fund noted that the greatest challenge in scaling AI infrastructure is ensuring a reliable and adequate power supply rather than simply increasing the availability of advanced computing hardware. As AI applications continue to grow, electricity demand is expected to rise significantly, making energy infrastructure an essential component of the industry’s expansion.

The report also examined concerns over whether the current surge in AI investment could develop into a financial bubble. It argued that the more important issue is whether companies investing billions in AI infrastructure can generate sufficient returns before rapid technological advancements reduce the value of existing assets.

Unlike previous technology investment cycles such as the dot-com and telecom booms, the report pointed out that today’s AI spending is largely financed by highly profitable global technology firms with substantial cash reserves. As a result, the current cycle appears financially stronger, although questions remain about long-term returns on these investments.

Concluding its assessment, Shriram Mutual Fund said India can secure meaningful economic gains from the AI revolution by expanding its capabilities in power generation, transmission and electrical infrastructure, positioning itself as a key supplier to the growing global network of AI-driven data centres.