Something big is happening in India’s tech world. OpenAI, the company behind ChatGPT, just announced plans to build a massive data center in the country. This isn’t just any ordinary facility – we’re talking about a 1 gigawatt powerhouse that could change how India fits into the global AI picture.
What Exactly Is OpenAI Planning?
OpenAI is exploring plans to build a data center in India with at least 1 gigawatt of capacity, as part of its global “Stargate” infrastructure expansion. To put this in perspective, most large data centers use between 20 to 100 megawatts of power. OpenAI’s proposed facility would be 10 times larger than typical operations.
The company has already registered as a legal entity in India and started building a local team, with plans to open its first office in New Delhi later this year. This marks a significant step for OpenAI’s expansion into what is already its second-largest user market.
The timing isn’t random either. CEO Sam Altman is expected to visit India this month and could announce the facility during his trip. The company is currently looking for local partners to help make this ambitious project a reality.
The Stargate Connection
This India data center isn’t happening in isolation. It’s part of OpenAI’s massive “Stargate” project – a $500 billion joint venture between OpenAI, SoftBank, Oracle and investment firm MGX that was announced at the White House in January. The goal is to build AI infrastructure on a scale we’ve never seen before.
OpenAI has already committed to building over 5 gigawatts of Stargate AI data center capacity in the U.S., which will run over 2 million chips. The India facility would extend this global network into Asia, creating a more connected AI infrastructure worldwide.
But why India? The answer lies in both practical benefits and strategic importance.
Why India Makes Perfect Sense
India offers several advantages that make it attractive for massive tech infrastructure projects. Data center construction in Mumbai costs $6.60 per watt, compared with higher costs in Tokyo and Sydney. This cost advantage means companies can build more capacity for the same investment.
The Indian government is rolling out the red carpet too. State governments offer incentives including land value exemptions up to 50% and complete stamp duty exemptions for data center development. The Indian government allocated $1.2 billion for the IndiaAI Mission to develop domestic AI capabilities.
India’s location also works in its favor. The country can serve both domestic and international markets effectively, making it a strategic hub for global operations. Plus, with its large English-speaking population and growing tech sector, India provides the human resources needed to operate such facilities.
India’s Growing AI Importance
The numbers tell the story of India’s rising importance in AI. ChatGPT users in India grew four-fold in the past year, according to CEO Sam Altman. This explosive growth shows the country isn’t just consuming AI technology – it’s becoming a major market that companies can’t ignore.
Other tech giants have noticed too. Google announced a $6 billion investment to develop a 1 GW data center in Visakhapatnam, while Microsoft has committed $3 billion for cloud and AI infrastructure over two years. OpenAI’s move puts it in direct competition with these industry leaders for India’s growing AI market.
The Indian government is taking AI seriously as well. The AI for India 2030 initiative, launched in alignment with the IndiaAI Mission in January 2024, emphasizes ethical, inclusive and responsible AI adoption to position India as a global leader in AI innovation.
What This Means for Regular People
For most Indians, this investment could mean faster, more reliable AI services. When AI companies build data centers closer to users, it reduces the delay between asking a question and getting an answer. It also means data can be stored locally, which is important for privacy and compliance with Indian laws.
OpenAI launched local data residency for Indian users of ChatGPT Enterprise, ChatGPT Edu and its API platform in May, ensuring data is stored within India in line with the country’s Digital Personal Data Protection Act, 2023.
The company is also making AI more accessible to Indians. OpenAI announced a major initiative to provide 500,000 free ChatGPT licenses for six months to students and teachers in India, covering government schools from Classes 1 to 12, engineering and technical institutes, as well as K-12 educators.
The Job Creation Factor
These massive infrastructure projects don’t just improve technology – they create thousands of jobs. OpenAI estimates that building, developing and operating 4.5 GW of data center capacity will create over 100,000 jobs across construction and operations roles. While this number refers to U.S. operations, similar job creation can be expected in India.
The jobs aren’t just in construction either. Data centers need skilled technicians, engineers, security personnel, and management staff to operate effectively. This creates opportunities across different skill levels and backgrounds.
Challenges Ahead
Building a 1 GW data center in India won’t be easy. The biggest challenge is power supply. India could require an additional 45–50 million square feet of real estate space and 40–45 Terawatt Hours incremental power by 2030 to meet the growing demand for AI.
The rapid expansion of data centers in India intensifies pressure on the country’s power infrastructure, creating an urgent need for enhanced transmission capabilities and grid stability. This means significant investments in power generation and distribution infrastructure.
There are also regulatory challenges. Industry representatives highlighted concerns around proposed data localization norms and other regulatory obstacles to AI infrastructure development including taxation issues, approval delays, and telecom licensing rules.
The Geopolitical Angle
This isn’t just about business – it’s about global technology leadership. The India effort comes as OpenAI coordinates an “OpenAI for Countries” initiative aimed at building AI infrastructure aligned with democratic partners, designed to improve latency, data residency and tailored services for local users while broadening the United States’ AI infrastructure presence outside China.
“Technological choices that India makes today are going to have a global impact,” according to experts discussing India’s AI infrastructure plans. This puts India in a unique position to influence how AI develops worldwide.
Looking at the Competition
OpenAI isn’t the only company betting big on India. NTT DATA has opened its biggest data center campus in India, a facility that can hold over 500 MW of power when fully operational, and aims to add 400 MW more in the coming years.
India’s AI market is forecasted to grow at a 26.37% CAGR from 2025 to 2031, reaching $31.94 billion by 2031. This rapid growth is attracting investments from multiple global technology companies, creating a competitive environment that benefits Indian users.
What Success Looks Like
If OpenAI’s India data center becomes reality, it could transform the country’s position in global AI. India could become not just a consumer of AI technology, but a major hub for AI innovation and development. This would create a ripple effect across the economy, boosting everything from software development to research institutions.
According to Abhishek Singh, CEO of IndiaAI, India’s broader push into deep tech is expected to raise around $12 billion in research and development investment over the next five years. OpenAI’s investment would add significantly to this total.
The Bottom Line
OpenAI’s plan to build a 1 GW data center in India represents more than just infrastructure expansion – it’s a bet on India’s future as an AI superpower. The combination of cost advantages, government support, growing user base, and strategic location makes India an attractive destination for AI infrastructure.
For India, this investment could accelerate the country’s transition into the AI age. It promises better technology services, more jobs, and a stronger position in the global tech landscape. However, success will depend on overcoming challenges around power supply, regulatory frameworks, and infrastructure development.
The next few months will be crucial as OpenAI finalizes its plans and India prepares to support such massive infrastructure. If everything falls into place, we could be looking at a major turning point in India’s tech journey – one that positions the country as a key player in the AI-powered future.
As more global AI companies look to expand internationally, India’s success with projects like OpenAI’s data center could set the template for how emerging economies can become central to the global AI ecosystem. The stakes are high, but so are the potential rewards.