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Tech Tonic | India should align with OpenAI’s mega AI Stargate Project

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Jan 22, 2025 03:51 PM IST

It’s an opportunity for India to align with the best and build on its strengths such as data centre capacity

Let us get some context at the outset. A $500 billion investment over a period of four years to build new artificial intelligence (AI) infrastructure, in what is less of a solo effort and something that’s definitively collaborative. That bodes well for eventual success. This investment amount, which defines aspirations of OpenAI’s Stargate Project, is roughly 10% of India’s GDP, or gross domestic product. That is the scale. That is the ambition. For chairman Masayoshi Son and OpenAI CEO Sam Altman to credit US President Donald Trump’s election as the pivotal moment for this investment, is perhaps the single biggest indicator of the country’s intent to dominate the global AI ecosystem.

President Donald Trump and OpenAI CEO Sam Altman at the Roosevelt Room at the White House (AP) PREMIUM
President Donald Trump and OpenAI CEO Sam Altman at the Roosevelt Room at the White House (AP)

What’s the plan with Stargate? As it is with much about AI, it is all about the models. Versatile, powerful models. The second element to that, is artificial general intelligence, or AGI, something OpenAI has talked about quite a bit in the past few months. They envision this smarter evolution of AI as we know it, as closer to reality than many expect. The reality, we’ll only bear witness to eventually.

This is, make no mistake about it, a wager to tilt the balance in the favour of the US as far as the AI stakes are concerned. “This infrastructure will secure American leadership in AI, create hundreds of thousands of American jobs, and generate massive economic benefit for the entire world,” OpenAI and Softbank’s joint statement makes clear the plan of action. Is there a way for the rest of the world to match this ambition? Is there a way for India to match this ambition? That is, if at all.

While this may be worrying for India at least on the face of it, it may not exactly be so. Government estimates suggest AI adoption will add $500 billion to India’s GDP by the time this year draws to a close, and that’ll be spearheaded by AI investments that are expected to the tune US$ 881 million. But there’s more to it than pure numbers. It is about holding the secret code that unlocks a place at the long table of power.

Collaboration is key. The initial equity funders for Stargate are SoftBank, OpenAI, Oracle and MGX. The confirmed structure suggests SoftBank will hold financial responsibility, while OpenAI will be responsible for operations. Softbank CEO Masayoshi Son, will be the chairman of the new Stargate Project company. And since this is all about the cutting-edge tech of the future, OpenAI finds willing partners in Arm, Microsoft, Nvidia and Oracle. There are some new partnerships in this, while existing ones have elevated stakes on the line.

Subplots galore

The first development of the first Stargate data centre infrastructure facility is in Texas but as the company says, they’re evaluating potential sites across the US. Which other states will become bases for more facilities in the coming months? Expect as much a political wrangle as it’d be a corporate one, to host those expansions. Will the political chasms widen as a result, or would common ground be easier to find, than otherwise expected?

Within this diorama, OpenAI’s existing partnerships with Nvidia (that’s been long-standing, since 2016) which should allow Stargate easy access to the chip maker’s cutting-edge hardware for data centres. Nvidia’s chips have been setting the benchmark that the likes of Intel, AMD, Qualcomm, Google, Amazon and Microsoft haven’t yet been able to match (some of these companies remain Nvidia’s top customers). Then there’s Oracle, a troika that should help Stargate build the computer systems for this $500 billion vision for AI dominance.

What about Microsoft, you ask? Stargate will heavily rely on Microsoft’s Azure cloud computing platform, not just for training the AI models but also delivering services eventually. By the scale, one would assume it’ll be leaning more towards large enterprises.

For India, an opportunity awaits

The question is, how does India respond to the Stargate Project. In all likelihood, one could expect a few other countries, China likely to be one, to make similar structures in the coming months. But specifically for this project, it may be prudent to ally, rather than try and compete with this scale.

This may well be an opportunity to align India’s AI ambitions by the route of partnerships. India’s role in the US-India Initiative on Critical and Emerging Technology (ICET) and Indo-Pacific Economic Framework for Prosperity (IPEF), both of which found footing under the Biden administration from a US perspective, gains importance. That will include partnering and providing expertise in the development of solutions that’ll use AI.

At the same time, there is a big opportunity in being a provider of data center capacity for companies to leverage for delivering services. Estimates suggest India’s data center capacity will be close to 2,070 MW, or megawatt (one megawatt is equal to one million watts of power), by the end of 2025.

This will serve to not just find a seat at the AI high table, but also strengthen the country’s AI ecosystem. Think about it — Stargate’s endgame is to have US’ ownership for the AI the world (or at least most of the world) uses. That’ll include large language models, generative AI, supervised and unsupervised learning models, deep learning models and all the apps or services that emerge from this standpoint. Which in all likelihood, will figure for a prominent envelope of anything we interface with on our smart devices.

We may have truly embarked on the weaponisation of AI. Diplomacy will have to figure in this conversation at some point. Until now, corporates did that to a limited extent. Now, all bets are off.

Vishal Mathur is the technology editor for HT. Tech Tonic is a weekly column that looks at the impact of personal technology on the way we live, and vice-versa. The views expressed are personal

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