Zoho Enters Hardware Space With AI-Focused Server Platform

Zoho has taken a major step beyond software by unveiling its first in-house server platform, called Nathu La, aimed at reducing the growing costs of AI infrastructure and cloud operations. The Chennai-based technology company says the new platform will improve energy efficiency, lower operating expenses, and give Zoho tighter control over the systems powering its expanding suite of products.

The servers have been developed by Zoho’s engineering team in Nagpur in partnership with Intel and are powered by Intel Xeon 6 processors. According to the company, the platform is already being deployed within Zoho’s own data centres to support AI and cloud-based workloads.

The move comes at a time when technology companies worldwide are struggling with rapidly increasing AI infrastructure expenses. As businesses expand their AI capabilities, the demand for high-performance computing systems has pushed hardware and operational costs significantly higher.

Speaking to Moneycontrol, Ramprakash Ramamoorthy, Director of AI Research at Zoho Corp, explained why the company decided to build its own infrastructure instead of depending entirely on external vendors.

"Hardware is one area where we have traditionally relied on global OEMs. But infrastructure has become foundational and if compute becomes foundational, we should own it," Ramprakash Ramamoorthy, Director of AI Research at Zoho Corp, told Money Control.

Zoho claims the Nathu La platform can deliver comparable performance while cutting power consumption by 12 to 18 percent. The company also estimates that the servers could reduce total ownership costs by 20 to 30 percent compared to conventional infrastructure setups.

The company currently serves more than 150 million users worldwide and operates over 16 data centres globally. Rising AI-related operational expenses reportedly played a key role in Zoho’s decision to move into hardware development.

"Infrastructure costs and inference costs are becoming one of the biggest line items for software companies," Ramamoorthy said. "The same server configuration that we purchased six months ago now costs three to four times more."

Unlike traditional hardware manufacturers, Zoho has clarified that it does not intend to commercially sell the Nathu La servers. Instead, the platform has been designed mainly for internal deployment across its own infrastructure ecosystem.

"We launched a server platform primarily for internal use. We are dogfooding it as we speak. Zoho runs on Zoho," Ramamoorthy said.

At present, Zoho reportedly has a few hundred Nathu La servers already operational within its infrastructure. The company plans to scale deployments to nearly 2,000 servers by the end of the year.

The announcement also arrives amid growing discussions around artificial intelligence and its long-term impact on education and employment. Zoho founder Sridhar Vembu has repeatedly cautioned students against becoming overly dependent on AI tools.

Responding recently to reports about increasing failure rates in computer science courses at UC Berkeley, Vembu argued that students must focus on building strong fundamentals before relying heavily on AI-powered systems.

"AI can make you smarter faster but AI can also make you dumber faster," Vembu wrote on X.

He has consistently warned that excessive AI usage could weaken independent thinking and problem-solving abilities among students. Referring to recent research findings, Vembu stated on X that "high school students don't learn mathematics better with AI, they just learn to rely too much on AI. AI is not a training wheel; it becomes a crutch."

Vembu has also shared his views on professions he believes will remain valuable in an AI-driven future. According to him, careers such as teaching, caregiving, farming, forest conservation, temple service, and classical music are likely to continue holding long-term relevance despite rapid advances in artificial intelligence.

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