OpenAI and TCS in advanced talks to launch Stargate India: Report

OpenAI is in advanced discussions with Tata Consultancy Services (TCS) to build artificial intelligence compute infrastructure in India, according to a report by The Economic Times. Citing people familiar with the matter, the publication stated that the collaboration would include co-developing agentic AI solutions for enterprises and would effectively launch OpenAI’s “Stargate India” chapter, strengthening TCS’s ambition to become the world’s leading AI-driven services company.

The Economic Times previously reported in September that OpenAI had initiated groundwork for the India phase of its Stargate project, engaging with the government and also holding talks with Reliance Industries. When negotiations with Reliance stalled, the conglomerate deepened existing partnerships with Meta and Google for its IGW compute hub in Jamnagar, Gujarat, and associated AI offerings.

According to the latest report, OpenAI is exploring a plan to lease at least 500 MW of data centre capacity from HyperVault, TCS’s newly formed data centre arm, to train and run its AI models in India. Alongside this, both companies are assessing opportunities to jointly build agentic AI solutions for large enterprises across sectors such as banking and financial services, retail, consumer goods and manufacturing, utilising frontier GPT large language models.

OpenAI is expected to become the first anchor client at the new HyperVault facilities, which are also intended to serve hyperscalers, major corporations, sovereign cloud operators, Tata Group entities and government agencies. With governments tightening data localisation requirements globally, the report noted that OpenAI has been rolling out local data residency options in key Asian markets including India, Japan, Singapore and South Korea.

The Economic Times added that senior TCS executives are currently in the US to finalise the partnership structure and commercial terms, with a formal announcement anticipated before the end of the year. However, the publication also reported that OpenAI has no current plans to take an equity stake in HyperVault. An official quoted in the report said that the Tata Group is not looking to dilute equity or rely too heavily on a single customer such as OpenAI, as the company aims to keep its offerings open to peers like Anthropic and avoid potential conflicts.

Beyond compute infrastructure, the partnership is positioned as a key element in TCS’s broader strategy to pivot towards next-generation computing. The company is focused on building end-to-end AI solutions, expanding ecosystem alliances, upskilling its global workforce and redesigning delivery models through AI agents.

The prospective tie-up comes as India rapidly strengthens its position in the global AI landscape. A Nasscom–BCG study cited in the report forecasts that India’s AI market will grow 25–35 per cent annually to reach $17–22 billion by 2027, fuelled by technology services, rising startup investment and a growing developer ecosystem. Earlier in October, Google and Reliance announced their own partnership to deploy AI chips in India, provide Jio users with free access to Google Gemini and jointly sell Gemini Enterprise solutions to Indian businesses.