OpenAI, TCS Discuss Launch of Stargate India Chapter to Strengthen Market Presence

According to The Economic Times, OpenAI and Tata Consultancy Services (TCS), the biggest software services exporter from India, are in advanced negotiations to collaborate on the development of artificial intelligence compute infrastructure in India. According to the report, which cited people with knowledge of the matter, the two businesses will also collaborate on creating agentic AI solutions for businesses. It also stated that the proposed partnership would launch OpenAI's "Stargate India" chapter and help TCS achieve its goal of becoming the biggest AI-led services provider in the world.

The most valuable artificial intelligence business in the world started laying the foundation for Stargate's India leg in September, according to a report in The Economic Times. The company also engaged with the government and had talks with Reliance Industries. But once the two sides' negotiations came to a standstill, Reliance fortified its alliances with longstanding partners like Google and Meta in order to develop AI services and the company's IGW compute hub in Jamnagar, Gujarat.

A Win-Win Deal for Both

In order to train and operate its AI models in India, the San Francisco-based company is reportedly looking at a plan to lease at least 500 MW of data centre capacity from HyperVault, TCS's recently formed data centre unit. At the same time, the two businesses are looking into collaborating to create agentic AI solutions using frontier GPT large language models (LLMs) for big businesses in a variety of industries, including manufacturing, retail, consumer products, banking, and financial services.

These facilities, which are anticipated to serve a wider range of customers, including hyperscalers, large organisations, sovereign cloud operators, Tata Group firms, and government agencies, are also likely to have OpenAI as their initial anchor client. OpenAI has launched local data residency options in important Asian markets, such as India, Japan, Singapore, and South Korea, as governments push for data localisation.

A formal announcement is anticipated by the end of the year, and the source states that a senior TCS leadership delegation is presently in the US to finalise the cooperation framework and commercial conditions. According to the article, OpenAI does not currently have any intentions to infuse equity into TCS's HyperVault. Tatas wants to expand their offerings to competitors like Anthropic rather than dilute stock or over-index on a single client like OpenAI.

The Economic Times quoted an official as saying, "An equity investment from one could potentially raise questions about conflict." In addition to the AI hardware, TCS and OpenAI's collaboration will be crucial as the former seeks to transform into a next-generation computing giant. Building end-to-end solutions, strengthening ecosystem alliances, upskilling its global workforce, and reimagining delivery models with AI agents are the strategy's main pillars.

India’s AI Sector Expanding its Nexus

The potential collaboration between TCS and OpenAI, Reliance, and Google coincides with India's quick rise to prominence in the global artificial intelligence scene. A Nasscom-BCG report projects that by 2027, the artificial intelligence market in India will have grown by 25–35% a year to $17–22 billion, propelled by IT services, increased startup investment, and a growing developer base.

Google and Reliance stated earlier in October that they would work together to sell Gemini Enterprise solutions to Indian companies, deploy AI processors in India, and give Jio consumers free access to Google Gemini. By establishing its first office in New Delhi, increasing local employment for sales leadership positions, and introducing more aggressive pricing for users in the nation, Altman has been bolstering the company's presence in India amidst the country's quickly growing position.