OpenAI in Advanced Talks with TCS to Bring “Stargate” Compute to India

OpenAI is in advanced talks with Tata Consultancy Services (TCS) to establish a large-scale AI compute presence in India and co-develop agentic AI products for enterprises, ET reported.

The proposed partnership would make OpenAI a major customer of TCS’s new HyperVault data-centre business and is being framed internally as the launch of a “Stargate India” chapter within OpenAI’s global infrastructure expansion.

OpenAI is reportedly negotiating a lease for at least 500 megawatts of HyperVault capacity to train and deploy models locally, a sizeable allocation that would position OpenAI as an anchor tenant in HyperVault’s planned gigawatt-scale facilities. At present, there are no indications that OpenAI will take an equity stake in HyperVault, with Tata executives reportedly seeking to avoid concentration risk as they court multiple AI customers.

HyperVault & Stargate Initiative

TCS and private equity partner TPG have already committed roughly ₹18,000 crore (around $2.1 billion) to build out HyperVault as part of a broader push to deliver sovereign, AI-ready data-centre capacity at gigawatt scale. HyperVault is being marketed as an India-based compute platform capable of serving hyperscalers, enterprise clients and government workloads.

A deal with OpenAI would directly align with OpenAI’s global “Stargate” initiative, a multi-country infrastructure effort aimed at developing localised compute and enterprise AI products in collaboration with regional partners. OpenAI has previously signalled interest in gigawatt-scale investment in India, with those plans accelerating amid rising enterprise demand, data residency norms and the need for low-latency deployment.

Why Tie-Up Matters?

For OpenAI, a domestic compute partner would speed rollout of enterprise products, satisfy local regulatory expectations on data handling and strengthen commercial ties with Indian corporates.

For TCS, the agreement would mark a significant strategic shift beyond IT services into AI infrastructure and ecosystem-building, an area the company is aggressively promoting through HyperVault. Industry observers say the deal, if finalised, could also attract other hyperscalers and sovereign AI projects to India.

Competitive Backdrop

The talks come at a moment when OpenAI is facing heightened competition from rival AI models and has recently redirected internal efforts to improve ChatGPT’s speed, reliability and personalisation. Earlier this month, OpenAI’s leadership declared a “code red” to fast-track product upgrades, underscoring the dual pressure of improving quality while scaling global infrastructure.

Senior TCS executives are reportedly in the US to close commercial terms, with a potential announcement expected by the end of the year if negotiations stay on track. Neither company has publicly confirmed the discussions, and analysts caution that large-scale infrastructure agreements often require lengthy finalisation and phased implementation.