Reliance Industries , one of India's largest conglomerates, is making a significant pivot towards artificial intelligence (AI) with a massive investment plan, while also navigating geopolitical challenges in its oil business and seeing growth in its telecommunications sector.

AI Infrastructure Investment

Reliance is pouring $12-15 billion into AI infrastructure, aiming to build a 1-gigawatt datacenter that could potentially propel its AI vertical to a $30 billion valuation by 2027, according to Morgan Stanley estimates.

Strategic Partnerships and Investments

Reliance has taken several strategic steps to position itself in the AI landscape:

1. Joint Venture with Meta: Reliance has incorporated Reliance Enterprise Intelligence Limited (REIL) as a joint venture with Meta. This partnership gives Meta a 30% stake in REIL, with an initial commitment of ₹855 crore for enterprise AI services.

2. Datacenter Capacity: Reliance plans to underwrite approximately 25% of the datacenter capacity itself, while the remaining capacity will be leased as 'Datacenter as a Service' to hyperscalers.

3. Partnerships with Tech Giants: The company is collaborating with Meta, Google, and Azure to utilize 100-megawatt Gen AI datacenter capacity for enterprise inference demand.

4. Google Cloud Partnership: Reliance has announced a partnership with Google Cloud to establish an AI-focused cloud region.

Two-Track Strategy

Reliance's AI strategy involves two main tracks:

1. Enterprise AI Services: Utilizing 100-megawatt Gen AI datacenter capacity for enterprise inference demand through partnerships with major tech companies.

2. Renewable Energy Integration: Building infrastructure to support 100 gigawatts of solar panel capacity, aligning with the company's commitment to sustainable energy.

Financial Projections and Returns

Morgan Stanley has provided the following financial projections for Reliance's AI venture:

Competitive Landscape

Reliance Intelligence is positioning itself to compete with global tech giants while simultaneously partnering with them:

• Competition: Developing AI products to compete with Meta and Google.
• Collaboration: Partnering with the same companies on infrastructure development.

Project Status

Construction has already begun on gigawatt-scale datacenters in Jamnagar, signaling Reliance's commitment to rapidly developing its AI capabilities.

Impact of Western Sanctions on Russian Oil Trade

In a separate development, Reliance Industries has informed stock exchanges that it is evaluating the implications of recent restrictions by the European Union, United Kingdom, and United States on Russian crude oil imports and refined product exports to Europe. The company has stated that it will comply with EU guidelines on refined product imports into Europe and will follow any guidance from the Indian Government.

Reliance emphasized its commitment to maintaining compliance with applicable sanctions and regulatory frameworks while adapting refinery operations accordingly. The company expressed confidence that its diversified crude sourcing strategy will ensure stability in refinery operations for both domestic and export requirements, including to Europe.

Jio's Subscriber Growth

Reliance's Jio telecommunications service gained 3.25 million new mobile subscribers during September, indicating continued growth in the company's subscriber base. This growth in the telecom sector further solidifies Reliance's position as a multi-faceted conglomerate with strong performances across various industries.

This strategic move by Reliance Industries demonstrates the company's ambition to become a major player in the global AI infrastructure market while navigating complex geopolitical challenges in its traditional energy business and expanding its telecom services. By leveraging partnerships with established tech giants and investing heavily in cutting-edge technology, Reliance is positioning itself at the forefront of India's AI revolution. The success of this venture could significantly impact the company's future growth and valuation, potentially reshaping the global AI landscape, while its careful approach to international oil trade regulations showcases its adaptability in a changing global environment. Meanwhile, the continued growth of its telecom business underscores the company's diverse portfolio and strong market presence across multiple sectors.

Reliance Industries Limited (RIL), one of India's largest conglomerates, has reported a notable shift in its shareholding pattern during the September quarter, alongside posting strong financial results for Q2. The company has also announced a significant joint venture in the AI space.

Shareholding Pattern Changes

RIL witnessed a rebalancing of its investor base in Q2, with domestic investors increasing their stakes while foreign portfolio investors (FPIs) reduced their exposure.

Notable changes include:

• ICICI Prudential Mutual Funds increased holdings to 1.70%
• SBI Mutual Funds raised stake to 2.52%

Q2 Financial Performance

Reliance Industries reported robust financial results for the quarter:

Stock Performance

RIL shares closed at ₹1,451.00, showing a decline of 6.00% over the past month and nearly 20.00% since the beginning of the year.

New Joint Venture in AI

In a significant development, RIL's wholly-owned subsidiary, Reliance Intelligence Limited, has incorporated a new entity named Reliance Enterprise Intelligence Limited (REIL). This new company will become a joint venture with Facebook Overseas, Inc., a subsidiary of Meta Platforms, Inc.

Key details of the joint venture:

• Reliance Intelligence will hold 70% stake
• Facebook will hold 30% stake
• Initial investment commitment: ~₹855 crore
• Focus: Developing, marketing, and distributing enterprise AI services

This strategic move positions Reliance Industries to capitalize on the growing AI market, leveraging its strong domestic presence and Meta's global technology expertise.

As Reliance Industries continues to diversify its portfolio and adapt to changing market dynamics, investors will be closely watching how these developments impact the company's long-term growth strategy and market position.