OpenAI and Tata Consultancy Services Ltd. have agreed to a partnership to develop local data centre capacity in India, the companies said. The collaboration, announced as part of OpenAI's Stargate initiative, will begin with a 100 megawatt facility that can be scaled up to 1 gigawatt, with OpenAI becoming the first customer of TCS' data centre business.
The deal was publicly confirmed by Tata Sons Chairman N. Chandrasekaran at the India AI Impact Summit. In a statement, OpenAI framed the infrastructure as a means to run its most advanced models locally - providing reduced latency while addressing data residency, security, and compliance needs for mission-critical and government workloads.
OpenAI described the agreement as one component of a wider "OpenAI for India" effort. That initiative will also see the company open its first offices in India, according to the company statement.
Under a related commercial arrangement, Tata Group will roll out ChatGPT Enterprise across its employee base over the coming years. Tata Consultancy Services additionally plans to integrate OpenAI's Codex into its software development processes.
Market reaction to the announcement was positive for TCS shares, which rose nearly 2% on the day the deal was disclosed. That movement provided the stock some relief after earlier volatility tied to concerns about AI-related disruptions.
The agreement arrives during a week of heightened activity between Indian firms and global AI companies, coinciding with an AI summit held in New Delhi. India has emerged as a large market for AI products and services; OpenAI said it counts more than 100 million weekly users in the country.
Policy developments appear supportive of such investment: the recent 2026-2027 budget permits foreign cloud service providers to operate tax free in India for the next two decades, a provision seen as encouraging cloud and data-centre investment.
Summary of the arrangement and immediate implications:
- The initial data centre will have 100 megawatt capacity with expansion potential to 1 gigawatt.
- OpenAI will be the inaugural customer for TCS' data centre business and will open offices in India as part of "OpenAI for India."
- Tata Group will deploy ChatGPT Enterprise to its employees and TCS plans to use OpenAI's Codex for development work.