U.S. private equity giant Blackstone is backing Indian AI infrastructure startup Neysa with up to $1.2 billion in combined equity and debt financing. This move underscores a growing trend: the race to build localized AI compute capacity as nations worldwide seek to control their own data and accelerate AI development.
India’s Push for Domestic AI Infrastructure
Neysa, based in Mumbai, will receive up to $600 million in primary equity from Blackstone, Teachers’ Venture Growth, TVS Capital, 360 ONE Asset, and Nexus Venture Partners. Blackstone will gain a majority stake. The company also plans to raise another $600 million in debt. This surge in funding comes as global demand for AI computing outstrips supply, particularly for specialized GPUs.
Why this matters: India is aggressively pursuing self-reliance in AI, driven by strategic concerns and the need to cater to domestic industries and government agencies. Unlike the U.S. or China, India currently lacks the concentrated compute power needed to compete in advanced AI development. This investment aims to correct that imbalance.
The Rise of “Neo-Clouds”
Neysa operates in the emerging “neo-cloud” segment, which offers dedicated GPU capacity tailored to enterprises, governments, and AI labs. Traditional hyperscalers like Amazon, Microsoft, and Google often struggle to meet niche demands for customization, regulatory compliance (like data localization), or low-latency performance.
According to Neysa CEO Sharad Sanghi, “A lot of customers want hand-holding… round-the-clock support… things that some of the hyperscalers don’t.” This points to a gap in the market for infrastructure providers that prioritize service and agility.
Rapid GPU Expansion Planned
Blackstone estimates that India currently has fewer than 60,000 GPUs deployed. The firm projects this figure to grow nearly 30-fold to over two million in the coming years. Neysa currently operates 1,200 GPUs and plans to scale to more than 20,000 as demand accelerates. The new capital will be primarily used for large-scale GPU clusters, with a portion allocated to R&D and software platform development.
The bigger picture: The expansion of AI infrastructure in India is being fueled by government demand, enterprises in regulated sectors (finance, healthcare), and AI developers who need local compute for data security and performance. Global AI labs are also seeking to deploy capacity closer to India’s massive user base.
Blackstone’s Broader AI Investment Strategy
This investment in Neysa aligns with Blackstone’s broader strategy of backing data centers and AI infrastructure globally. The firm has previously invested in QTS, AirTrunk, CoreWeave (U.S.), and Firmus (Australia), demonstrating its conviction in the long-term growth of AI computing.
Neysa aims to triple revenue next year and eventually expand beyond India. Founded in 2023, the startup employs 110 people across multiple offices.
“We are seeing a demand that we are going to more than triple our capacity next year,” said Sanghi. “Some of the conversations we are having are at a fairly advanced stage… we could see [expansion] sooner rather than later.”
In conclusion: Blackstone’s substantial investment in Neysa signals a major bet on India’s emerging AI infrastructure market. The deal reflects a global trend toward localized AI compute as nations seek to secure their position in the rapidly evolving AI landscape. The coming years will reveal whether India can successfully build its own AI ecosystem and close the gap with leading tech powers.
