OpenAI and TCS advance talks on HyperVault partnership to build AI compute infrastructure in India

OpenAI-TCS Talks Advance on HyperVault AI Data Centre Partnership: Reports | AIM

The proposed arrangement would make OpenAI the first anchor tenant in HyperVault's upcoming gigawatt-scale, AI-ready data centres. OpenAI is in advanced discussions with Tata Consultancy Services (TCS) to partner on building large-scale AI compute infrastructure in India and co-developing agentic AI solutions for enterprises, The Economic Times reported, citing people familiar with the matter. According to the report, OpenAI is negotiating a leasing agreement of at least 500 MW of data-centre capacity from HyperVault, TCS' new data-centre subsidiary. The proposed arrangement, the report claimed, would make OpenAI the first anchor tenant in HyperVault's upcoming gigawatt-scale, AI-ready data centres. AIM has written to TCS for confirmation and more inputs on the partnership. The partnership is expected to support TCS' ambition of becoming the "world's largest AI-led services company," with both firms exploring agentic AI solutions for sectors such as BFSI, retail, consumer goods and manufacturing, the report said. Senior TCS leadership is currently in the US to finalise commercial terms, with a formal announcement targeted before the end of the year, ET reported. There are, however, no plans for any equity infusion from OpenAI into HyperVault at this stage, as the Tata Group is cautious about diluting equity or relying heavily on a single customer. The collaboration would mark the launch of OpenAI's Stargate India chapter, forming part of its strategy to build sovereign AI infrastructure across key global markets. In October this year, TCS had announced the incorporation of a new wholly owned subsidiary, HyperVault AI Data Center Limited ("HyperVault"). In a strategic shift that could secure steady, recurring income rather than one-off project fees, the company said it expects the contracts linked to its data-centre expansion to be long-term agreements with hyperscalers and AI companies. These will focus on "long-term committed and annuity revenues", even as negotiations remain underway. Subsequently, the Indian IT giant announced that it secured a $1 billion investment from global alternative asset manager TPG to accelerate the expansion of HyperVault.

OpenAI Strives for Tata Hand to Grow Footprint in India

OpenAI, the world's most-valued artificial intelligence company, is in advanced talks to partner with India's largest software services exporter Tata Consultancy Services (TCS) to build AI compute infrastructure in India and co-develop agentic AI solutions for enterprises, said people in the know. OpenAI, the world's most-valued artificial intelligence company, is in advanced talks to partner with India's largest software services exporter Tata Consultancy Services (TCS) to build AI compute infrastructure in India and co-develop agentic AI solutions for enterprises, said people in the know. A partnership with the Tata Group would mark the beginning of OpenAI's Stargate India chapter while accelerating TCS' ambition of becoming the "world's largest AI-led services company." India has the second-largest user base of ChatGPT after US. In September, ET had reported that OpenAI had begun groundwork for the India leg of Stargate, engaging with the government and holding negotiations with Reliance Industries. However, the two sides failed to agree on terms. Since then, Reliance has deepened ties with long-time allies Google and Meta to build out Reliance's 1 GW compute hub in Jamnagar, Gujarat, as well as AI service offerings. The San Francisco-based OpenAI, valued at $1 trillion, is negotiating a leasing agreement of at least 500 MW of data centre capacity from TCS' new data centre arm HyperVault to train and run its AI models locally. The two technology powerhouses are also keen to build agentic AI solutions for large enterprises across sectors such as BFSI, retail, consumer goods, manufacturing etc., powered by frontier GPT large language models (LLMs). Last month, TCS and private equity group TPG announced their decision to cumulatively invest up to Rs 18,000 crore ($2.1 billion) in HyperVault to build gigawatt-scale, AI-ready data centres in a 51:49 alliance. The announcement came after the Tata flagship company first revealed its plans that entailed a total capex outlay of $6.5-7 billion in investments to be funded via debt and equity. OpenAI is set to be the first anchor tenant of the data centres that will also be housing customers such as hyperscalers, corporate clients, sovereign cloud operators, Tata Group companies and government entities. With governments insisting on data localisation, OpenAI has enabled local data residency in key Asian countries including India, Japan, Singapore and South Korea. The senior leadership team of TCS is said to be in the US to finalise the contours of the partnership and other commercial details with a target to make a formal announcement by the end of the year. However, there are no plans for any equity infusion by OpenAI in HyperVault at this juncture. "Tatas are not keen to dilute equity or over index on a single customer like OpenAI and they want to broaden their offerings to peers like Anthropic. An equity investment from one could potentially raise questions around conflict," said a group official. TCS and OpenAI didn't respond to queries. Going beyond artificial intelligence hardware, a partnership with OpenAI will be critical as the Indian tech company is looking to pivot toward becoming a next-generation computing power. The core pillars of this strategy include building end-to-end solutions, strengthening ecosystem play, upskilling global workforce and reinventing delivery models through AI agents.