This development, cited to unidentified sources, could represent OpenAI's largest infrastructure investment in Asia and a key extension of its ambitious Stargate AI project, underscoring the company's strategy to localize operations amid surging demand from Indian users.
Reuters was unable to independently verify the report at the time of publication, and OpenAI did not immediately respond to a request for comment outside regular business hours.
However, the move aligns with OpenAI's recent announcements to deepen its footprint in India, its second-largest market by user base after the United States. In August 2025, the company revealed plans to open its first office in New Delhi later this year, while CEO Sam Altman has publicly highlighted the fourfold growth in ChatGPT users over the past year.
Altman is scheduled to visit India in September 2025, where he may announce details of the proposed facility, though the exact location and timeline remain uncertain.
Background on OpenAI's India Expansion
OpenAI, backed by Microsoft, has been steadily building its presence in India since formally registering as a legal entity earlier this year and assembling a local team.
The company currently employs Pragya Misra as its head of public policy and partnerships in the country, and it has begun posting job openings, including sales roles requiring at least seven years of experience.
This expansion comes as India emerges as a powerhouse for AI adoption, with millions of students, educators, professionals, and developers leveraging OpenAI's tools for learning, creativity, and problem-solving.
To cater to price-sensitive users, OpenAI launched "ChatGPT Go," an affordable subscription plan priced at ₹399 (about $4.75) per month, offering enhanced features like higher usage limits and access to advanced models such as GPT-5.
This initiative, exclusive to India, aims to boost accessibility and has contributed to the platform's explosive growth. Altman has praised India's "amazing tech talent, world-class developer ecosystem, and strong government support through the IndiaAI Mission," positioning the country as a potential global AI leader.
OpenAI has also partnered with the Indian government, providing 500,000 free ChatGPT licenses to students and educators, and collaborating on the IndiaAI Mission to develop localized language models.
The Stargate Project: Fueling Global AI Infrastructure
The proposed data center is reportedly tied to OpenAI's Stargate initiative, a landmark private-sector effort announced by U.S. President Donald Trump in January 2025.
Stargate, a joint venture involving OpenAI, SoftBank, Oracle, and Abu Dhabi-based MGX, pledges up to $500 billion over four years to build AI infrastructure, starting with an initial $100 billion deployment.
The project aims to construct massive data centers—each potentially spanning 500,000 square feet—to power advanced AI models, create hundreds of thousands of U.S. jobs, and secure American leadership in the technology amid competition from China.
While Stargate's core focus is on U.S. facilities (with initial sites in Abilene, Texas, already under construction), it has expanded internationally through the "OpenAI for Countries" program.
Notable projects include Stargate UAE (announced in May 2025 with G42 and partners) and Stargate Norway (launched in July 2025, emphasizing renewable energy).
The India data center would fit this pattern, enabling localized AI services, reducing latency for Indian users, and addressing data sovereignty concerns by storing data within the country.
A 1GW facility would rank among India's largest, comparable to investments by Google ($6 billion for 1GW) and Reliance Industries' Mukesh Ambani, who is building what could be the world's biggest data center.
Trump's administration has supported Stargate through executive actions, including revoking prior AI safety regulations and expediting energy infrastructure via emergency declarations.
Key technology partners like Microsoft, Nvidia, and Arm provide the computing power, with Oracle supplying over 2 million AI chips for global data centers.
However, the project has faced skepticism; Elon Musk, CEO of rival xAI, publicly questioned the funding in January 2025, claiming SoftBank lacked the resources—though Altman dismissed the claim.
Implications for India and the Global AI Landscape
For India, the data center could accelerate AI innovation by providing scalable compute resources for startups, researchers, and enterprises, aligning with the government's IndiaAI Mission to build indigenous models and foster a $957 billion economic contribution from AI by 2035.
It would also create jobs in construction, engineering, and operations, while enhancing data privacy under India's Digital Personal Data Protection Act.
Potential partners like Yotta Data Services (already collaborating with Microsoft) and locations such as Hyderabad are under consideration.
Globally, this move intensifies the AI infrastructure race. OpenAI's expansion counters challenges from Chinese firms like DeepSeek, whose low-cost models have disrupted markets.
It also reflects a broader trend: Tech giants like Microsoft ($80 billion in AI data centers this year) and Amazon ($20 billion in projects) are investing heavily, but energy demands—data centers could triple global capacity needs by 2030—pose hurdles.
In India, where AI employment is projected to grow 20-25% annually to 416,000 professionals, such investments could democratize access but raise concerns over job displacement and ethical AI use.
As Altman prepares for his September visit, eyes are on potential announcements that could solidify India's role in the AI revolution. With Stargate's backing, OpenAI's India foray not only boosts local capabilities but also advances U.S.-led global AI dominance, potentially reshaping economic and geopolitical dynamics in the process.