As OpenAI explores ways to localise the data of Indian users for its generative AI model ChatGPT, the company is likely to rely on its largest investor Microsoft for the same, sources said.
One of the ways for localisation, which OpenAI is looking at, is leveraging Microsoft Azure data centres in the country. As part of Azure cloud services, Microsoft has data centres in India. This allows hosting of AI models, applications, and data storage within India.
“While the option of data localisation is always open through partnership with domestic data centre solution providers, discussions are also going on to leverage Microsoft’s local data centres,” an industry executive said.
This way it would be simpler for OpenAI to ensure compliance with Indian data sovereignty laws, reducing latency and offering faster processing of data generated within the country, the executive added.
For OpenAI, India is now the second largest market and the company has tripled its user base in the country last year. OpenAI’s plan to locally store data of ChatGPT users in Indian servers assume significance with the requirement of the Digital Personal Data Protection (DPDP) Act to store data in the country.
“India is an incredibly important market for AI in general and OpenAI in particular,” OpenAI chief Sam Altman had said earlier this month during his trip to India.
Last month, Microsoft chairman and CEO Satya Nadella announced the company’s plans to invest $3 billion in India in cloud and AI infrastructure and skilling over the next two years. The same includes the establishment of new data centres in the country as well.
Microsoft already has three data centre regions in the market, which consists of several data centres. The fourth will go live in 2026. The company said the $3 billion investment aims to develop a scalable AI computing ecosystem to meet the growing demands of India’s expanding AI start-ups and research community.
“OpenAI is a partner of Microsoft. If Microsoft expands Azure Cloud in India and takes huge data centre capacity, then it can easily address OpenAI’s data localisation needs,” another industry executive said.
Microsoft is also understood to be in talks to utilise co-located data centres in India, industry executives said.
The same means leasing space in existing data centres in India rather than building its own from scratch. In this arrangement, Microsoft would share the infrastructure of local data centre solution providers such as Yotta, CtrlS, Sify, among others, while still maintaining control over its own servers, networking hardware, and other critical systems.
