India's AI Boom Faces Energy Crunch, reveals Pure Storage Report

India's digital transformation is accelerating, driven by cutting-edge technologies like AI. However, as AI adoption soars, enterprises are grappling with significant infrastructure challenges and sustainability concerns, according to a new report by Pure Storage.

The report, "India’s AI Journey: Balancing Innovation with Sustainable Growth," highlights the dichotomy between India's ambition to be an AI leader and the environmental impact this growth may entail.

AI Adoption and the Energy Crisis

India's AI landscape is growing at a rapid pace, with 52% of organizations already deploying AI and 35% in pilot stages. The banking, financial services, and insurance (BFSI) sector leads this wave, alongside technology, media, and telecommunications.

Yet, the expansion of AI technologies is exacerbating infrastructure demands, with compute power and storage needs doubling for over 40% of organizations.

The energy consumption problem is becoming critical. Data centers, responsible for 1-2% of global energy usage, are under increasing pressure as AI expands, contributing to rising operational costs and complicating efforts to meet environmental, social, and governance (ESG) goals.

According to Pure Storage, 74% of Indian organizations have expressed concerns over AI’s impact on energy use, underscoring the need for energy-efficient IT systems.

Infrastructure at the Crossroads

One of the report’s key takeaways is the necessity for robust IT infrastructure. As much as 85% of organizations in India indicate that their current systems are inadequate to handle AI’s demands, with 74% planning to upgrade data management tools and processes.

The hybrid cloud strategy is gaining traction, but many sectors, such as BFSI and government, prefer on-premise solutions due to compliance and security concerns. The challenge remains: how to modernize infrastructure to support AI while ensuring security and sustainability.

AI applications are being deployed across diverse functions—64% of organizations are using AI for virtual assistants and chatbots, while 45% utilize it for IT operations and cybersecurity. As AI-driven automation scales, reliable, secure, and energy-efficient data management becomes paramount.

Pure Storage’s Call for Sustainable Innovation

The findings from Pure Storage resonate with a critical need to balance AI innovation with sustainability goals. As AI becomes central to India’s economic aspirations—potentially contributing $450-500 billion to the nation's GDP by 2025—the infrastructural changes required to sustain AI growth without compromising environmental targets are urgent.

Ajay Singh, Chief Product Officer at Pure Storage, noted, “As AI adoption surges in India, organizations are driving innovation across sectors, but they struggle with rising energy demands and meeting ESG goals. Our report highlights the urgent need to invest in robust, energy-efficient systems that can power AI-driven growth while securing a greener future for all.”

Conclusion

India’s AI journey is a balancing act between fast-tracked innovation and sustainability. While sectors like BFSI and telecom are leading in AI deployment, they also face mounting energy and infrastructure challenges. As companies plan upgrades, it is crucial to focus on energy-efficient, next-generation IT systems to ensure AI adoption remains sustainable, supporting India’s growth aspirations without compromising its climate goals.