OpenAI has said it will enable Indian companies and organisations using its AI products to store data locally in anticipation of legal and regulatory requirements involving data localisation.
The Microsoft-backed AI startup is rolling out data residency options for ChatGPT Enterprise, ChatGPT Edu, and API clients in India as well as in countries such as Japan, Singapore, and South Korea. Data residency is a term used to refer to the physical location of an organisation’s data.
“With data residency, eligible API customers and new ChatGPT Enterprise and Edu customers can choose to have customer content stored at rest in supported countries,” OpenAI said in a blog post published on Wednesday, May 7.
Its data residency offering is built upon existing enterprise-grade data privacy, security, and compliance features, as per the company. Several organisations across Asia including Kakao, SoftBank, Grab, and Singapore Airlines have opted for OpenAI’s data residency, the company said.
Earlier this year, The Indian Express reported that data localisation norms had made a comeback in the draft rules proposed by the IT Ministry to operationalise the Digital Personal Data Protection Act, 2023. Data localisation refers to regulatory actions that result in the restriction of data flow within the boundaries of a jurisdiction.
The draft DPDP Rules, 2025, propose that the kind of personal data allowed to be processed by significant data fiduciaries (like Meta, Google, Apple, and other major tech companies) will be determined by a central government-formed committee subject to the restriction that such personal data is not transferred outside Indian territory.
The storage of customer data on OpenAI’s servers located in India may also have an impact on the copyright infringement lawsuit filed by news agency ANI against the startup. As per courtroom proceedings, OpenAI had argued that Indian courts did not have jurisdiction over this matter since its servers are based abroad.
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While these servers will not store training data, it remains to be seen how Wednesday’s announcement will influence the case.
What data will be stored by OpenAI in India?
OpenAI said that under its data residency option, customers can create new ChatGPT workspaces that enable customer data to be stored locally in that region. “This includes users’ conversations with ChatGPT and custom GPTs in your Enterprise or Edu workspace, including user prompts, uploaded files, and content across text, vision, and image modalities,” the company said.
According to OpenAI, the locally stored data will be encrypted when it is in transit between customers and OpenAI as well as between OpenAI and its service providers.
The company stated that it will not use the stored customer data to train its AI models. “By default, OpenAI’s models are not trained using data from ChatGPT business plans or the API unless a customer explicitly opts in to share data with us,” OpenAI said.
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“For the API Platform and ChatGPT business products, data remains confidential, secure, and entirely owned by you,” it added. ChatGPT Enterprise and ChatGPT Edu customers as well as its API clients can enable data residency by creating a new Project in the API Platform dashboard and selecting the relevant country.
The data collected through the API platform will be stored in the chosen country, it said.
Building AI infrastructure for other countries
OpenAI also launched an initiative to help other countries build out their AI infrastructure by onboarding the AI startup and the US government as partners. The OpenAI for Countries initiative is part of the $500 billion Stargate project announced by US President Donald Trump earlier this year.
“It’s clear to everyone now that this kind of infrastructure is going to be the backbone of future economic growth and national development,” OpenAI said in a blog post.
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“This is a moment when we need to act to support countries around the world that would prefer to build on democratic AI rails, and provide a clear alternative to authoritarian versions of AI that would deploy it to consolidate power,” it added.
“We’ve heard from many countries asking for help in building out similar AI infrastructure.In response to these interested governments, OpenAI is offering a new kind of partnership for the Intelligence Age,” it further said.
Under the initiative, OpenAI and the US government will work to build data centres in other countries in order to provide customised versions of ChatGPT tailored for local languages and cultures to improve healthcare, education and public services.
The projects under this initiative will involve “local as well as OpenAI capital.” “Partner countries also would invest in expanding the global Stargate Project,” it added.
