The California-based software firm behind the popular chatbot announced on Wednesday that it had chosen the British capital as part of its expansion plans.
UK science, innovation and technology minister Chloe Smith called it a "vote of confidence for Britain as an AI powerhouse".
"Our AI sector already employs more than 50,000 people across the country, and we will continue to foster an approach which unlocks opportunity and cements our place as a global destination for artificial intelligence," she added.
Prime Minister Rishi Sunak met the chief executives of OpenAI, Google DeepMind and Anthropic at Downing Street last month.
The meeting was designed to discuss joint action to ensure the safe and responsible development of artificial intelligence, as well as governance.
Sunak has called AI "the defining technology of our time".
On a visit to Washington earlier this month, he announced a first AI summit, seeking a leading role for the UK in limiting potential doomsday risks.
The British leader wants a future global AI regulator to be based in London, angling for a place at the table as the United States and the European Union seek to establish an AI code of conduct.
OpenAI chief Sam Altman backs long-term institutional oversight but has warned that "heavy regulation" could hamper the rapid development of the technology.
His company said "London's vibrant technology ecosystem and its exceptional talent make it the ideal location" to locate its first international office.
"The teams in London will focus on advancing OpenAI's leading-edge research and engineering capabilities while collaborating on our mission with local communities and policy makers," it added.
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