Mega Networks Proposes To make AI Servers in Maharashtra By CIOTechOutlook Team

Mega Networks Proposes To make AI Servers in Maharashtra

CIOTechOutlook Team | Monday, 22 April 2024, 03:04 IST

Mega Networks, a hardware-based firm, intends to establish a factory in Maharashtra to locally manufacture artificial intelligence servers by the third quarter of the current fiscal year 2024-2025, its chief executive Amrish Pipada said. The company plans to invest Rs 350-400 crore in FY25.

“The initial investment for setting up the factory will be funded through internal accruals and debt of Rs 100-120 crore, with the remainder raised from long-term debt and private equity,” Pipada said.

Mega Networks is one of only two Indian businesses chosen to participate in the production-linked incentive (PLI) scheme 2.0 for IT hardware. Under this program, the government of India offers an incentive of approximately 5% on the net incremental sales of goods made in India.

It collaborates with US chipmaker Intel on technology. According to Pipada, Intel's Habana Gaudi 1 and 2 series and scalable processors of the 4th and 5th generation optimize the AI servers launched in February. The modular servers have applications in high-performance computing, generative AI, and data centers.

“The funnel we have right now for AI servers is huge. If we are able to convert even 20%, our business will grow by 100-200%,” Pipada said.

The firm has identified potential orders for the servers worth close to Rs 1,000 crore and confirmed bookings worth Rs 150-200 crore. Pipada added that Mega Networks plans to hire around 400 people in roles like R&D, finance, marketing, and sales over the next year to support growth. The business generated Rs 300 crore in FY24, representing a 30% increase over FY23. Pipada says the company hopes to reach Rs 1,000 crore in two to three years to manufacture AI servers.