OpenAI is reportedly in advanced discussions with Tata Consultancy Services (TCS), India’s largest exporter of software services, to build artificial intelligence computing infrastructure in the country, according to a report from ET.

Sources cited in the report say the two companies plan to jointly create enterprise-focused agentic AI tools. The collaboration is expected to signal the beginning of OpenAI’s “Stargate India” effort while also supporting TCS in its ambition to become the world’s leading AI-driven services provider.

ET had earlier noted that OpenAI began laying the foundation for the India phase of the Stargate project, holding conversations with government officials and engaging with Reliance Industries. When discussions with Reliance slowed, the conglomerate strengthened existing relationships with companies like Meta and Google as it continued developing its IGW compute hub in Jamnagar, Gujarat, along with related AI services.

Details of the potential OpenAI and TCS collaboration

The report states that OpenAI is considering leasing at least 500 MW of data center capacity from HyperVault, TCS’s newly launched data center division, to support training and deployment of its AI models in India. Alongside this infrastructure plan, both companies are exploring the development of agentic AI products for large enterprises in sectors such as finance, retail, consumer goods, and manufacturing, using next generation GPT models.

OpenAI is expected to serve as the first major client for these facilities. The centers are anticipated to serve a wide range of customers including hyperscalers, major corporations, sovereign cloud providers, Tata Group companies, and government bodies. As more governments mandate local data storage, OpenAI has begun offering in-country data residency options in India, Japan, Singapore, and South Korea.

A senior leadership team from TCS is reportedly in the United States working to finalize the structure and commercial terms of the partnership. A formal announcement could arrive before the end of the year.

The report also notes that OpenAI is not expected to take an equity stake in HyperVault. According to one source quoted by the publication, TCS is not interested in diluting ownership or becoming overly dependent on a single client. They also want the freedom to work with other major AI developers such as Anthropic, which could become complicated if OpenAI held a stake.

Beyond the infrastructure aspect, the partnership would be significant for TCS as it aims to evolve into a next generation computing powerhouse. Its broader strategy focuses on creating complete AI driven solutions, strengthening ties across the tech ecosystem, upgrading the skills of its global workforce, and rethinking service delivery with the help of AI agents.

India’s expanding role in global AI

This potential partnership between TCS and OpenAI takes shape at a time when India is becoming a central player in the worldwide AI ecosystem. A joint study by Nasscom and BCG estimates that the country’s AI market could grow between 25 and 35 percent annually, reaching up to 22 billion dollars by 2027. Growth is expected to come from the technology services sector, increased startup investment, and a rising number of developers.

In October, Google and Reliance unveiled their own collaboration to introduce AI chips in India, provide Jio customers with complimentary access to Google Gemini, and jointly market Gemini Enterprise solutions to Indian businesses.

Amid these developments, Sam Altman has been expanding OpenAI’s footprint in India by opening its first office in New Delhi, increasing local hiring for sales leadership roles, and launching more competitive pricing for Indian users.