TLDRs:
- OpenAI in talks with TCS to expand AI infrastructure in India.
- Proposed 500 MW lease could boost India’s data center capacity by 33 percent.
- Renewable energy and 24/7 clean power are key to AI expansion.
- HyperVault’s gigawatt-scale data centers may host hyperscalers and government clients.
OpenAI, the San Francisco-based AI powerhouse valued at around US$1 trillion, is reportedly negotiating a major deal with Tata Consultancy Services (TCS) to lease at least 500 megawatts (MW) of data center capacity.
The move aims to accelerate AI model training and enterprise AI operations within India, highlighting the growing importance of local data residency amid rising regulatory and business demands in Asian markets.
The discussions, according to industry sources, involve TCS’ HyperVault unit, which is building gigawatt-scale data centers designed to accommodate hyperscalers, corporate clients, and government entities. If finalized, OpenAI would become HyperVault’s first major tenant, marking a significant milestone in India’s AI infrastructure growth.
Lease Scale Raises Capacity Questions
A 500 MW data center lease represents roughly one-third of India’s existing 1.5 GW data center capacity. While the size of the planned lease is ambitious, analysts note that significant challenges remain, including site approvals, grid connectivity, and securing long-term power supply agreements.
TCS has outlined plans to develop more than 1 gigawatt of AI-focused data center capacity over the coming years, but details such as exact locations, timelines, and high-voltage utility connections are yet to be disclosed. The project would require substantial coordination with state utilities and compliance with environmental and construction regulations.
Renewable Energy Could Power AI Demand
India’s growing renewable energy capacity presents an opportunity to meet the 24/7 power requirements of AI data centers. In the first half of 2025 alone, the country added 3.8 GW of solar open-access capacity, enabling large electricity consumers to purchase power directly from generators via the grid.
Battery storage solutions and flexible energy banking can help address the intermittent nature of renewables, making continuous AI operations feasible. States like Maharashtra and Karnataka, which have streamlined open-access approvals, are likely targets for renewable developers seeking to secure long-term power purchase agreements (PPAs) with data center operators.
Innovative Energy Models Support AI Centers
New initiatives, such as Princeton Digital Group’s hourly carbon-free energy matching scheme, demonstrate how AI data centers can achieve near-constant clean energy use. Through a 25-year PPA with Tata Power Renewable Energy, the program aligns hourly power consumption with renewable supply, a model that can be scaled for HyperVault’s facilities.
As AI adoption accelerates globally, the India-TCS partnership with OpenAI could serve as a blueprint for integrating advanced AI infrastructure with renewable energy solutions, paving the way for sustainable, high-capacity computing across the region.
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