Prime Highlights
- OpenAI and TCS announced a strategic partnership to build local data centres in India under the Stargate initiative, starting with a 100-megawatt facility scalable to one gigawatt.
- The collaboration supports OpenAI’s broader India expansion plans, including deploying ChatGPT Enterprise across Tata Group’s workforce and opening its first offices in the country.
Key Facts
- OpenAI will be the first customer of TCS’ data centre business, enabling its advanced models to operate within India while meeting data residency, security, and compliance requirements.
- TCS shares rose nearly 2% following the announcement, as India’s 2026–2027 budget also allows foreign cloud providers to operate tax-free for 20 years to encourage AI infrastructure investment.
Background
OpenAI and Tata Consultancy Services Ltd. (TCS) on Thursday announced a partnership to build local data centres in India as part of the AI company’s Stargate initiative. The companies will begin with a 100-megawatt facility that can scale up to one gigawatt over time.
OpenAI said it will be the first customer of TCS’ data centre business. The infrastructure will allow OpenAI’s advanced models to operate securely within India. The company added that the local setup will reduce latency and meet data residency, security and compliance requirements, especially for government and mission-critical workloads.
Tata Sons Chairman N. Chandrasekaran unveiled the partnership at the India AI Impact Summit. The move marks a major step in expanding India’s AI infrastructure and deepening collaboration between global AI firms and Indian technology companies.
The agreement falls under OpenAI’s broader “OpenAI for India” plan, which includes opening its first offices in the country. Under a separate arrangement, Tata Group will deploy ChatGPT Enterprise across its workforce in the coming years. TCS also plans to integrate OpenAI’s Codex tools into its software development processes.
TCS shares climbed nearly 2% following the announcement. The partnership offers a boost to the IT services giant after recent concerns that AI disruption could weigh on its business.
The deal comes as India hosts a major AI summit in New Delhi, drawing global technology leaders. OpenAI says more than 100 million people in India use its services every week, showing that the country’s AI market is growing fast.
The Indian government has also encouraged AI investment. In its 2026–2027 budget, India let foreign cloud service providers operate tax-free for the next 20 years to encourage long-term infrastructure and technology growth.