OpenAI, the developer of ChatGPT, is exploring partnerships with several Indian data centre firms as part of its plan to localise its $500 billion Stargate project, according to The Economic Times. Companies in the mix include Sify Technologies, Yotta Data Services, E2E Networks and CtrlS Datacenters.
The ET report noted that OpenAI has also been in parallel talks with Reliance Industries for over six months. Reliance is currently planning to set up what it claims will be the world’s largest data centre in Jamnagar, Gujarat.
Sources told The Economic Times that OpenAI’s conversations so far have focused on critical considerations such as data centre capacity, geographic presence, and assured power supply. The push follows requests from the Indian government urging OpenAI to allocate a significant portion of Stargate’s $500 billion investment to India and to store Indian users’ data locally.
“India is becoming a critical market for OpenAI and could emerge as a major revenue hub,” one government official told ET. Officials have argued that, like Microsoft, Google, Meta and AWS, OpenAI should set up local data storage and processing to cut latency and enhance service quality.
Executives at some of the firms involved confirmed to The Economic Times that discussions had begun, though they cautioned that agreements remain far from final. A senior executive remarked that the key factor will be which partner can guarantee a steady supply of energy for OpenAI’s massive computing requirements.
OpenAI chief Sam Altman recently underscored India’s importance, telling ET that the country is the company’s second-largest market after the US and is expanding at an “incredibly fast” pace. The company is opening its first office in New Delhi, accelerating local hiring, and offering aggressive pricing for Indian subscribers.
Altman added that OpenAI is prioritising partnerships to tailor AI solutions for India and make them more affordable, ET reported. Last month, OpenAI also enabled data residency in countries such as India, Japan, Singapore and South Korea, ensuring that “data at rest” remains within national borders, though model processing is still conducted overseas.
Stargate, announced in January, is a joint venture backed by OpenAI, SoftBank, Oracle and MGX, with Masayoshi Son of SoftBank as chairman. Microsoft, Nvidia, Arm and Oracle are also listed as core technology partners, ET highlighted.
Industry experts told The Economic Times that India’s data centre ecosystem is well-positioned to support AI workloads thanks to competitive power costs, abundant talent, and a strong domestic market. However, shortages of high-end GPUs and advanced cooling systems remain hurdles.
India currently accounts for less than 1% of the world’s AI computing capacity, ET reported, underscoring the scale of the challenge. By comparison, estimates from Morgan Stanley suggest OpenAI’s infrastructure requirements for a 1 GW hyperscale data centre could demand around 135,000 of Nvidia’s latest B100 chips and a continuous 1.3 GW power supply — far above India’s current non-AI cloud data centre capacity of under 1 GW.
Still, momentum is building. The Economic Times pointed out that Google Cloud is reportedly investing $6 billion in a 1 GW data centre in Andhra Pradesh, while Reliance has announced a 1 GW facility in Jamnagar, integrated with a $10 billion new energy complex.
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