“OpenAI is looking for ways to expand its India presence, which is a natural process since India is one of the biggest developer ecosystems for the company. With multiple competitors within the US itself, and now coupled with the emergence of China as a force to reckon with, the company is in process of doubling down on its India presence. It has already begun discussing ways to localize its Indian citizens’ data in domestic data centres, in anticipation of the Digital Personal Data Protection Act, 2023. The move to localize data operations is likely to commence soon,” one of the three executives said on the condition of anonymity.
The DPDP Act states that a copy of data belonging to Indian citizens must be stored in the country at all times by any company with over five million active users. Queries sent to an OpenAI spokesperson remained unanswered.
Sam Altman, chief executive of OpenAI, was in India on Wednesday on his second visit here. In conversation with union IT minister Ashwini Vaishnaw, Altman said that India was “OpenAI’s second largest market globally”—underlining the importance of the market’s size in the company’s data operations.
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It is not clear if OpenAI has identified data centres to ramp up its India presence. However, Hiranandani Group-backed data centres firm, Yotta Data Services, is seen a frontrunner.
“Yotta’s presentation to the Ministry of Electronics and IT (Meity) to become a vendor for the India AI Mission showcased Microsoft as an exclusive AI partner. With OpenAI and Microsoft’s close equations, Yotta is in the running to localize OpenAI’s India operations in the near future,” the second executives added.
All three executives affirmed that OpenAI is yet to commence data localization, but is stepping up discussions.
Discussions on data localization come less than a month of the company’s counsel telling the Delhi High Court that it has no local operations and is not under Indian jurisdiction. OpenAI was responding to a lawsuit on copyright infringement filed by a consortium of news publishers.
During his session with Vaishnaw, Altman added that his comment on India building foundational models, which he made during his maiden visit here in June 2023, was “taken out of context.”
“That was a certain time of scaling AI, and I still think that pre-trained foundational AI models are expensive. But, one of the most exciting things that have happened in the industry is that there’s a lot that we’ve done now in distillation of AI models. There’s a lot that we’ve done with small models, and reasoning models today are not cheap, but still doable. This can lead to an explosion of creativity, and India should be a leader there,” Altman said.
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Altman had earlier said that India “should not even try” to build foundational AI models. Since then, OpenAI has faced increasing competition from its fellow Big Tech firms such as Meta, which has open-sourced a part of its AI work with its Llama set of models, and Google with its Gemini models. More recently, on 20 January, Chinese upstart DeepSeek claimed to have created its foundational AI model, R1, at a fraction of the cost that OpenAI has spent on research and development to date.
Altman said that cost reduction is the natural way forward, and India’s work through developers and startups is part of this evolution.
“There are two ways to look at the cost of models. To stay at the frontier, we believe that the costs of building and maintaining foundational models will continue to rise in an exponential curve, but the returns to increasing intelligence are exponential in terms of the economic and scientific value that is being created. Our Stargate project will go accordingly,” he said.
Vaishnaw added that the India AI Mission is designed around developing India’s own foundational AI model, and creating infrastructure to enable the development of a full-stack AI ecosystem—in line with Altman’s view of the market.
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“India is an incredibly important market for AI in general. For OpenAI, it is our second biggest market, and we’ve tripled the number of users here over the past year. But mainly, seeing what people in India are building with AI at all levels of the stack—chips, models and applications, India should be doing everything, and should be one of the global leaders of the AI revolution,” Altman said.
On Wednesday, Mint reported that the Centre is working on its own AI chip in partnership with the Centre for Development of Advanced Computing (C-Dac), which will also look to bring down the cost of AI computing and give India an indigenous processor to build and refine its future foundational AI models, in the long run.
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