ChatGPT maker OpenAI is reportedly in advanced discussions with India’s Tata Group to establish its first major AI compute infrastructure in India. This news comes after the company’s previous negotiations for a large-scale partnership with Reliance Industries failed to materialise.
The proposed deal centers around a collaboration with Tata Consultancy Services (TCS) and its new data center joint venture, HyperVault. Sources indicate that OpenAI is set to become the first anchor tenant at HyperVault’s forthcoming gigawatt-scale facilities, with plans to lease at least 500 MW of data center capacity. This immense infrastructure would be used to train and run OpenAI’s cutting-edge AI models locally.
OpenAI’s strategic shift after failed talks with Reliance
The talks of a deal with the Tata Group follow an earlier attempt by OpenAI to secure a foundational partnership with Mukesh Ambani’s Reliance Industries, which reportedly broke down after the two sides could not agree on commercial terms. In the wake of the failed talks, Reliance has strengthened its alliances with OpenAI’s rivals, Google and Meta, and is proceeding with plans to build a massive 1 GW compute hub in Jamnagar, Gujarat, accelerating AI service offerings in direct competition.
For OpenAI, the partnership with TCS is seen as a crucial step in implementing its global ‘OpenAI for Countries’ initiative, which aims to build local infrastructure and customise its products, including ChatGPT, for specific regional needs and languages.
Beyond leasing data center capacity, the two giants are also planning to co-develop agentic AI solutions for large-scale enterprises across key sectors like banking, retail, and manufacturing, leveraging OpenAI’s frontier GPT large language models (LLMs).
TCS and HyperVault’s AI venture
The partnership is also crucial for the Tata Group, as it accelerates TCS’s stated ambition of becoming the world’s largest AI-led services company. HyperVault, the data center arm, is a joint venture between TCS (51% majority stake) and the private equity firm TPG, which announced plans to invest up to Rs 18,000 crore ($2.1 billion) to develop AI-ready data centers.
TCS’s new facilities are planned to house a variety of clients, including hyperscalers, corporate entities, and government operators. With OpenAI as the first anchor tenant, the venture would immediately solidify its position as a major player in India’s rapidly expanding data center market. According to reports, senior TCS leadership is currently in the US working to finalise the commercial and legal details of the partnership, with a formal announcement targeted for the end of the year.
