OpenAI is expected to rely on its biggest backer, Microsoft, as it looks at methods to localize the data of Indian users for its generative AI model ChatGPT, according to sources.
Using local Microsoft Azure data centers is one of the localization strategies that OpenAI is considering. Microsoft maintains data centers in India as part of its Azure cloud services. This makes it possible to host AI models, apps, and data storage in India.
“While the option of data localisation is always open through partnership with domestic data centre solution providers, discussions are also going on to leverage Microsoft’s local data centres,” an industry executive said.
The CEO went on to say that this would make it easier for OpenAI to guarantee adherence to Indian data sovereignty regulations while lowering latency and providing quicker processing of data produced domestically.
India is currently OpenAI’s second-largest market, and the business quadrupled its user base there in the previous year. The Digital Personal Data Protection (DPDP) Act’s mandate that data be stored in India makes OpenAI’s intention to locally store ChatGPT users’ data on Indian servers significant.
“India is an incredibly important market for AI in general and OpenAI in particular,” OpenAI chief Sam Altman had said earlier this month during his trip to India.
Microsoft CEO and chairman Satya Nadella said last month that the business will spend $3 billion on cloud and AI infrastructure and training in India over the next two years. This also applies to the construction of new data centers around the nation.
There are now three data center areas in the market for Microsoft, each of which contains many data centers. In 2026, the fourth will launch. The $3 billion investment, according to the business, is intended to create a scalable AI computer ecosystem in order to satisfy the increasing needs of India’s booming AI research community and start-ups.
“OpenAI is a partner of Microsoft. If Microsoft expands Azure Cloud in India and takes huge data centre capacity, then it can easily address OpenAI’s data localisation needs,” another industry executive said.
According to industry experts, Microsoft is also reportedly in discussions to use co-located data centers in India.
The same goes for renting space in already-existing data centers in India as opposed to starting from scratch. Under this agreement, Microsoft would retain control over its own servers, networking devices, and other vital systems while sharing the infrastructure of regional data center solution providers like Yotta, CtrlS, and Sify, among others.
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