OpenAI is reportedly in advanced discussions with Tata Consultancy Services (TCS) to significantly expand its AI footprint in India. This collaboration aims to establish AI compute infrastructure within India and jointly develop agentic AI solutions for enterprises.
A partnership with the Tata Group would mark the commencement of OpenAI's "Stargate India" initiative and accelerate TCS's ambition to become the world's leading AI-driven services company. India has the second-largest user base of ChatGPT, following the United States.
OpenAI is negotiating a leasing agreement for at least 500 MW of data center capacity from TCS's new data center arm, HyperVault, to train and operate its AI models locally. The two companies also intend to create agentic AI solutions for major enterprises in sectors such as BFSI (banking, financial services, and insurance), retail, consumer goods, and manufacturing, utilizing frontier GPT large language models (LLMs).
Last month, TCS and private equity firm TPG declared their decision to collectively invest up to Rs 18,000 crore ($2.1 billion) in HyperVault to develop gigawatt-scale, AI-ready data centers in a 51:49 partnership. This announcement followed TCS's initial plans for a total capital expenditure of $6.5-7 billion funded through debt and equity. OpenAI is expected to be the first anchor tenant of these data centers, which will also house hyperscalers, corporate clients, sovereign cloud operators, Tata Group companies, and government entities.
TCS has been proactive in the AI space. It recently launched TCS MasterCraft™ augmented with GenAI and Agentic AI, which automates the modernization of legacy applications, reducing costs and time for manual conversions by over 70% and achieving results twice as fast. TCS has also introduced new agentic AI solutions for Microsoft Azure, aimed at simplifying software engineering and IT operations. These include TCS Agentic SDLC on Microsoft Azure and TCS Autonomous Operations on Microsoft Azure. Furthermore, TCS is adopting Gemini Enterprise to build agentic AI solutions, enhancing workforce innovation and enterprise AI growth.
India is rapidly emerging as a crucial arena in the global AI landscape, with alliances like OpenAI-Tata and Google-Reliance competing for dominance. In October 2025, Google and Reliance Industries announced a collaboration to deploy AI chips in India, provide free Google Gemini access to Jio users, and co-sell Gemini Enterprise solutions to Indian businesses. According to a Nasscom-BCG study, the AI market in India is projected to grow annually by 25-35%, reaching $17-22 billion by 2027, driven by tech services, startup investments, and a growing developer population.
The partnership with OpenAI will be critical for TCS as it aims to become a next-generation computing power. The core pillars of this strategy include building end-to-end solutions, strengthening ecosystem play, upskilling the global workforce, and reinventing delivery models through AI agents. This move also aligns with the challenges faced by Indian software services companies due to the disruption of the traditional, human-led services model by AI.
