airtel-Perplexity fallout: Because Mukesh Ambani has indirect exposure to OpenAI, there’s some wild speculation going around that Jio could tie up with OpenAI for an India distribution bundle for ChatGPT. I argue why that is likely but not because of the reason listed above. Everyone’s missing the real story - the Microsoft Azure servers already humming in Jio's data centers.
Firstly, Ambani owns a small stake in major OpenAI backer Thrive Capital (the management company and not as an LP in its funds). But this is not even his most significant connection to OpenAI. I want to highlight two more.
OpenAI last month reportedly held talks with Ambani’s Reliance Industries Limited (RIL) and Saudi Arabia's sovereign wealth fund Public Investment Fund (PIF), among others, for a new round of financing. RIL and the Saudis have an excellent long-standing relationship. So much so that PIF head and aramco chairman Yasir al-Rumayyan serves on RIL’s board of directors. PIF is also an investor in Reliance Retail, and back in 2021, Aramco planned to acquire 20% stake in RIL for $15B. Though the deal didn’t materialize, the relationship with Saudis opens up global access for RIL, including a potential OpenAI investment.
The most significant one though is RIL’s existing 10-year cloud partnership deal with Microsoft, under which Jio operates two data centers in India that host Azure’s compute, used exclusively for services provided to Jio customers. Microsoft, as you know, is among the OpenAI’s largest investors.
Until recently, Azure was the exclusive cloud provider for OpenAI’s training and inference. They now also use Google Cloud to run some of their workloads (FYI - Alphabet owns 7.7% stake in Jio).
This is where RIL could leverage its Microsoft/Azure partnership for a potential deal to distribute ChatGPT.
But the biggest boost could very well come from regulations. The government will want some value accrued to domestic companies in their push for data sovereignty in sectors involving sensitive personal data. (See: RBI’s data localization mandate for PSOs).
Jio is in a winning position because it has existing Azure compute infra in India for all of OpenAI needs if such a regulation were to be passed. When you already control the pipes, you don't need to beg for the water.
All said, global distribution is a solved problem for OpenAI. ChatGPT likely already has >100 million users in India. RIL needs ChatGPT more than the other way around.