AI infrastructure startup RackBank plans to expand its data centre footprint into tier-II cities like Indore and Raipur to reduce operational costs by two to three times compared to metro cities.

The firm, which recently launched its AI cloud business NeevCloud, has acquired six acres in Indore for an 18 MW facility and 13 acres in Raipur for a 100 MW data centre, supported by respective state governments with power subsidies and regulatory ease. “In tier-1 cities, it costs Rs 50 crore per megawatt to build. We do it for Rs 25 crore in tier-2,” said Narendra Sen, founder and CEO of RackBank and NeevCloud. He also highlighted the firm's immersion cooling system, Varuna, which helps reduce capital costs by up to 10x.

RackBank plans to raise Rs 700 crore in debt to fund the expansion. Earlier, it raised USD 16.5 million in equity from D-Street investors.

NeevCloud, launched in 2023, operates over 700 GPUs, including Nvidia’s latest chips, and caters to enterprise AI, medical diagnostics, and government clients.