TCS, OpenAI In Advanced Discussion To Build AI Infra In India: Report

Adding another layer to its India expansion push, AI giant OpenAI is said to be in advanced discussions with Tata Consultancy Services (TCS) to build AI compute infrastructure in the country, as well as co-develop agentic AI solutions for enterprises. 

As per an ET report, the collaboration would mark the launch of OpenAI’s Stargate initiative in India along with TCS’ ambition to become the world’s leading AI-led services company.

A senior TCS leadership team is currently in the US to finalise the partnership structure and commercial terms, with a formal announcement expected before the end of the year, as per the report.

The Sam Altman-led company is considering leasing at least 500 MW of data centre capacity from HyperVault TCS’s newly formed data centre subsidiary to train and run its AI models within India, it noted. 

OpenAI is expected to serve as the first anchor client at these upcoming facilities, which will also cater to a wider range of users including hyperscalers, major enterprises, sovereign cloud operators, Tata Group businesses and government agencies. 

Inc42 has reached out to OpenAI and TCS for comments on the latest development. The story will be updated on receiving their responses.

This would mark another instance where TCS would be deepening its partnership with OpenAI in recent years. Back in 2023, the duo announced a partnership to launch a new GenAI enterprise adoption offering on Microsoft Cloud to help its customers initiate their GenAI adoption journey.

Given the deepening of GenAI adoption in India since then, the ChatGPT parent has been looking to deepen its presence in the country. Worthy to mention that India commands the second largest userbase for ChatGPT after the US. 

In the US, the Microsoft-owned company launched the StarGate project earlier in January, with an intention to invest $500 Bn over the next four years to build new AI infrastructure for OpenAI in the US. 

Subsequently, it was reported that the Indian government had requested OpenAI to invest a part of the $500 Bn project in India and store the data of Indians locally, given the fact that the country is a key market for OpenAI.

In line with this, the ChatGPT parent is said to be looking to set up a data centre in India with at least 1 GW capacity.

Earlier in September, OpenAI was reported to be exploring partnerships with companies like Reliance, E2E Networks, CtrlS Datacenters and Sify Technologies to bring StarGate to India. The AI company hasn’t made any announcements regarding the materialisation of these discussions till now.

Besides setting up AI infra in the country, OpenAI also recently modified its terms for low-cost subscription plan ChatGPT Go by scrapping the subscription fees for one year. This is a bid to further deepen its market share in the Indian AI market. 

Prior to ChatGPT Go’s launch, the AI company rolled out its latest version of its large language model GPT-5 in early August, for users across the globe. Back then, Altman hinted that OpenAI is working with local partners to make AI work for Indian use cases.

Meanwhile, TCS recently announced that its board has approved the incorporation of a wholly owned subsidiary in India to establish multiple AI data centres with a combined capacity of 1 GW.

Under this, the tech giant would be focussing on building advanced AI infrastructure and offering tech-enabled services to support its AI development.