OpenAI in talks with TCS to begin Stargate India chapter, expand footprint

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OpenAI is in advanced talks to partner with Tata Consultancy Services (TCS), India’s largest software services exporter, to develop artificial intelligence compute infrastructure in India, The Economic Times reported.

 

Citing people familiar with the development, the report said that the two companies will also co-develop agentic AI solutions for enterprises, adding that the proposed tie-up would mark the start of OpenAI’s “Stargate India” chapter and support TCS’s push to become the world’s largest AI-led services company.

 

In September, The Economic Times reported that the world’s most valuable artificial intelligence company commenced the groundwork for Stargate’s India leg and engaged with the government, and held negotiations with Reliance Industries. However, when the talks between the two stalled, Reliance strengthened its ties with long-time allies such as Meta and Google to build the company’s IGW compute hub in Jamnagar, Gujarat, as well as AI service offerings.

 

OpenAI–TCS partnership

 

According to the report, the San Francisco-based company is said to be exploring a plan to lease at least 500 MW of data centre capacity from HyperVault, TCS’s newly established data centre arm, to train and run its AI models in India. Simultaneously, the two companies are also exploring co-developing agentic AI solutions for large companies across several sectors, such as banking and financial services, retail, consumer goods and manufacturing, powered by frontier GPT large language models (LLMs).

 

OpenAI is also likely to be the first anchor client at these facilities, which are expected to cater to a broader mix of users, including hyperscalers, large enterprises, sovereign cloud operators, Tata Group companies and government agencies. As governments push data localisation, OpenAI has introduced local data residency options in key Asian markets, including India, Japan, Singapore and South Korea.

 

According to the report, a senior TCS leadership delegation is currently in the US to close the partnership framework and commercial terms, with a formal announcement expected by the end of the year.

 

However, the report said that OpenAI has no plans for equity infusion in TCS’s HyperVault at this point. "Tatas are not keen to dilute equity or over-index on a single customer like OpenAI, and they want to broaden their offerings to peers like Anthropic. An equity investment from one could potentially raise questions around conflict," an official was quoted as saying by The Economic Times.

 

Apart from the artificial intelligence hardware, TCS and OpenAI’s partnership will also prove to be critical as the former aims to pivot towards becoming a next-generation computing power. The strategy’s core pillars include building end-to-end solutions, deepening ecosystem partnerships, upskilling its global workforce and reinventing delivery models using AI agents.

 

India emerging as a key AI hub

 

The prospective partnership between TCS and OpenAI, Reliance and Google comes at a time when India is rapidly emerging as a key arena in the global artificial intelligence landscape. According to a Nasscom–BCG study, India’s artificial intelligence market is expected to grow 25–35 per cent annually to $17–22 billion by 2027, driven by tech services, rising startup investment and an expanding developer base.

 

Earlier in October, Google and Reliance announced a partnership to deploy AI chips in India, offer Jio users free access to Google Gemini and jointly sell Gemini Enterprise solutions to Indian businesses.

 

Amid India’s rapidly emerging position, Altman has been strengthening the company’s presence in India by setting up its first office in New Delhi, expanding local hiring for sales leadership roles and rolling out more aggressive pricing for users in the country.