OpenAI targets India with datacentre push

OpenAI is preparing a one-gigawatt datacentre in India as part of its $500bn “Stargate” infrastructure push, in what would be its biggest bet yet on its second-largest user base.

The facility, to be built under the OpenAI for Countries programme launched in May 2025, aims to support local artificial intelligence (AI) computing while complying with India’s personal data protection regime.

OpenAI CEO Sam Altman, expected in New Delhi later this year to open the company’s first India office, said in a recent X post that OpenAI is “excited to invest much more” in the country. Details on the datacentre's location, partners and timelines remain unclear.

The upcoming datacentre is among the first ten projects under a US-backed effort to develop global AI infrastructure and offer an alternative to rivals like China.

It is expected to reduce latency for OpenAI’s India customers such as 10BedICU, which is using OpenAI’s application programming interfaces (APIs) and AI models to transcribe patient-doctor consultations, summarise patient records and capture data from hospital monitors. In May 2025, OpenAI enabled data residency in India for ChatGPT Enterprise, ChatGPT Edu, and its API platform, to comply with local data sovereignty rules.

“The OpenAI move clearly reflects the growing importance of Indian users for its AI offerings,” said Naresh Singh, senior director analyst at Gartner. He noted that without a datacentre in the country to operate its AI models and agents, “it would be difficult, if not impossible, to meet growing data residency and AI sovereignty requirements” likely to be imposed on service providers in India.

Singh sees potential for stronger ties with government and businesses, provided OpenAI partners smartly to meet India’s regulatory and market needs. The company is reportedly exploring a partnership with Reliance Industries and is working with the Ministry of Electronics and Information Technology (MeitY) under the IndiaAI Mission.

Deepika Giri, associate vice-president for big data analytics and AI at IDC Asia-Pacific, noted that India’s growing digital backbone of cloud and data infrastructure is key to scaling AI across different sectors. And with inference demand soaring since 2023, OpenAI’s India datacentre could accelerate AI adoption across both large enterprises and small and medium-sized businesses, she added.

According to IDC, AI spending in India is set to outpace overall tech investment by more than twofold, adding $115bn to the economy by 2027. Giri noted that OpenAI’s focus on data residency could give it an edge over hyperscalers like Google, Meta and Microsoft.

In addition, Giri said a successful OpenAI datacentre in India could inspire global players to prioritise localised AI compute investments in the country with a focus on sustainability. “India’s power constraints mean renewable integration will be vital if AI-ready infrastructure is to scale sustainably,” she added.

Beyond infrastructure, OpenAI is partnering with the Indian Institute of Technology in Madras to conduct long-term studies on how AI can improve learning outcomes and foster innovative teaching methods. It is also offering training, API credits for IndiaAI fellows, and distributing free ChatGPT licences to students and educators.

In August 2025, MeitY restarted consultations on its national datacentre policy to speed up datacentre builds in India with a single-window clearance system. It is also planning new datacentre economic zones to drive datacentre expansion into smaller cities.