OpenAI Data Centre in India?

OpenAI is preparing for something significant, quite literally. Reports indicate that the creator of ChatGPT is poised to expand its presence in India by establishing a data centre.

The move comes as India is focusing on AI sovereignty and data localisation. This might be the best move for OpenAI to ensure privacy and security laws in the country, even as leading music labels like T-Series and Saregama have joined the copyright lawsuit against the AI giant.?

Furthermore, while the world considers using China’s DeepSeek, OpenAI could again take the lead and provide more open-source models for India, which CEO Sam Altman has been considering for some time.

During his recent visit to India, Altman underscored the country’s growing AI influence. “I think India should be one of the leaders of the AI revolution,” he said, acknowledging its rapid adoption of AI, from chips to models to applications.?

As India is OpenAI’s second-largest market by user count, establishing a locally situated data centre would be essential to bolster India’s expanding AI ambitions.??

However, where might this data centre be located?

Maybe, Microsoft Can Help

Though still in early talks, OpenAI is reportedly discussing with data centre operators, targeting completion by 2025.

Microsoft, an investor in OpenAI, might offer some help here. The tech giant just launched a 1.2 million sq. ft. engineering hub in Hyderabad, which will house 3,000 engineers. The Telangana government is working towards 100% digital connectivity for nine million households and the development of AI-driven data centres.

Minister Sridhar Babu called Hyderabad “the city of the future,” boasting 52 R&D institutions, 30 universities, and a 6-million-strong workforce.

He highlighted Microsoft’s Hyderabad journey: “From a small R&D centre to its largest hub outside the US.”

So, OpenAI might take help from Microsoft to take a slice of the data centre for its operations.

Google Follows Suit in Telangana

Microsoft is not the only company expanding in Telangana. Its rival, Google, is also joining the force. Google for Startups will provide mentorship and accelerator programs to help new businesses grow. This will further strengthen Telangana’s network of over 500 AI startups and more than 80 emerging companies.

IT Minister Sridhar Babu called it a “big step” toward making Telangana an AI powerhouse. “Telangana is shaping the future of AI, and our collaboration with Google marks a major leap forward.”

However, whether it is Microsoft, Google, or OpenAI, Telangana is the biggest beneficiary. The state is already investing $15 billion in Future City and AI City, Young India Skill University and deep tech centres in quantum computing, bioinformatics, and legal tech.

This is all while Telangana and Karnataka are going head-to-head in India's AI revolution! Check out the video below to find out who is going to be India’s AI Capital.

But it’s a “Power” Struggle

India’s AI and data centre market is booming, and it is set to jump from $4.5B in 2023 to $11.6B by 2032, at a 10.98% CAGR. However, with coal still generating 75% of India’s electricity, sustainability is a challenge.?

Though companies like Yotta and CtrlS aim to reduce energy consumption in the coming years, there is still a continued power struggle.?

However, Ann Dunkin, former chief information officer at the US energy department, spoke with AIM at the Invest Karnataka Summit and said India is well-positioned to tap into renewable resources to support the power-hungry AI infrastructure.

Meanwhile, Reliance Group is building the world’s largest data centre in Jamnagar, Gujarat, powered by NVIDIA GPUs. At 3 gigawatts, it will dwarf today’s largest, which barely crosses 1 gigawatt.

India’s AI revolution is in full swing—now, can it power up without burning out?