ChatGPT maker OpenAI's plan to set up India data centre in the works

ChatGPT maker OpenAI has initiated the process of setting up data centre operations in India to support the growing number of users and the increasing demand for its artificial intelligence (AI) tools in the country, sources told Business Standard. 

The data centre is likely to house the data of Indian users as well as some smaller neighbouring countries, a person familiar with the development said. 

“They are talking to some data centre operators right now, but these are very initial phases of their plan. It may take some time for them to get down to the details, such as the location and capacity,” the source said. 

Though the company has not set a timeline for launching the data centre in India, sources said OpenAI was “keen to complete the process within this year”.  An email sent to OpenAI did not elicit a response.

 

Currently, OpenAI operates data centres in Texas, US, where most of its servers are located. To efficiently serve users worldwide, OpenAI also utilises Microsoft’s Azure Cloud services. OpenAI, however, currently doesn’t have an office in India.

 

If OpenAI’s plans to establish a data centre in India materialise, the country will be among the few where the company has both offices and a data centre.

 

OpenAI currently has offices in Tokyo, Paris, Brussels, New York, Seattle, Singapore, San Francisco, London, and Dublin.

 

India has become OpenAI’s second-largest market, with the number of users in the country tripling over 2024, according to OpenAI Chief Executive Office Sam Altman during his visit to India nearly 10 days ago.

 

“Seeing what people are building in India with AI at all the levels of stack, chips, models…you know all of the incredible applications, I think India should be doing everything. It is really quite amazing to see what the country has done and embraced the technology,” Altman had said during his India visit on February 5.

 

A day later, senior OpenAI executives had held two separate meetings — one with government officials from the Prime Minister’s Office, the US Embassy in India, the Ministry of Finance, and the Ministry of Home Affairs, and another with technology policy advocacy groups, organised by The Quantum Hub (TQH).

 

Both these meetings, held behind closed doors, featured OpenAI executives, including Vice President of Engineering Srinivas Narayanan, who explained the company’s products, offerings, and the importance of India in OpenAI’s overall plans, sources had then said.

 

The second meeting was attended by nearly 20-25 industry and technology policy advocacy groups, including Nasscom, TQH, The Dialogue, Broadband India Forum, BSA, The Centre for Internet & Society, Youth Ki Awaaz, and representatives from law firms, such as Cyril Amarchand Mangaldas and Shardul Amarchand Mangaldas.

 

Building AI infrastructure has been one of OpenAI’s key focus areas. Along with Oracle and SoftBank, the company announced the $500 billion Stargate programme in January this year.

 

Meanwhile, India’s data centre industry is expected to undergo a major shift, with 40-50 per cent of its capacity dedicated to AI and graphics processing unit workloads by 2030. The country’s overall data centre capacity is projected to triple to 3 gigawatts (Gw) during the same period.

 

Global Cloud players, such as Microsoft, Amazon Web Services (AWS), and Google, are set to become major players in owning their own captive data centres, which will generate over 1 Gw of capacity in the next five years.

 

Microsoft’s fourth data centre, currently under development in Hyderabad, is expected to be one of the largest in India. Similarly, Google and AWS are expanding their presence in Mumbai, with Google negotiating the acquisition of 22.5 acres in Navi Mumbai for its first captive data centre. AWS is also exploring a land parcel near Mumbai.

 

At present, captive data centres owned by global Cloud players account for 10 per cent of the country’s total live data centre capacity. However, these companies have been actively acquiring land in various locations across India to build larger facilities.