India's Growing AI Appetite Faces Infrastructure Challenges
India has developed an insatiable appetite for artificial intelligence, emerging as the world's fastest-growing market for ChatGPT. Recent estimates indicate that Indian users constitute approximately 14% of the platform's global user base, representing the largest share worldwide. This growing enthusiasm for AI technology is now sparking domestic innovation and ambitious government plans.
Homegrown AI Models Enter the Arena
The Indian AI landscape is witnessing the emergence of local competitors. On May 23rd, Bangalore-based startup Sarvam AI unveiled an "Indic" large language model capable of conversing in multiple Indian languages. Earlier this month, Bharat Gen, a publicly funded AI model, made its debut. Both initiatives aim to enable users to interact with artificial intelligence in their native tongues, ranging from Hindi to Malayalam.
Prime Minister Narendra Modi has articulated a bold vision for India's AI future, asserting that the country must lead in this transformative technology and that global AI progress remains incomplete without India's participation. The government's ambitions were further detailed in February when Technology Minister Ashwini Vaishnaw committed to developing an indigenous foundational AI model within ten months and domestic AI chips within three to five years.
The Reality Check: Investment and Infrastructure Gaps
Despite these ambitious goals, India's current standing in the global AI race reveals significant challenges. India attracted only $1.2 billion in private AI investment during 2024, placing it twelfth globally behind countries like Austria and Sweden. This pales in comparison to the United States at $109 billion and China at $9 billion.
The country's digital infrastructure also lags considerably, with Indian data centers accounting for merely 3% of global capacity. While nations like America and China build foundational platforms from scratch, India primarily adapts and repurposes foreign models for domestic requirements. No Indian AI model currently ranks among the top 200 LLMs evaluated by benchmarking platform LMArena.
Even recent domestic achievements reveal dependency on foreign technology. Sarvam's system is built atop French firm Mistral's technology, while Bharat Gen utilizes other open-source variants.
Government Initiatives and Critical Shortcomings
Recognizing these gaps, policymakers have launched a $1.2 billion program to bolster local AI development. This initiative has already facilitated the acquisition of more than 34,000 chips, which are being made available to researchers and startups. However, this quantity represents just one-tenth of the computing power available to American social media giant Meta.
Sarvam AI will have access to 4,000 chips for six months through this program. Abhishek Singh, who leads the IndiaAI Mission overseeing the project, states that the objective is to catalyze a domestic AI ecosystem by making processors available at approximately one-third of global costs.
Nevertheless, critical shortcomings persist. Anirudh Suri of India Internet Fund argues that policymakers are overly focused on chips and code rather than building comprehensive infrastructure that enables AI development to thrive.
Data accessibility remains a fundamental obstacle. Despite India's massive digital footprint—including one of the world's largest bases of smartphone users, internet subscribers, and digital transactions—much valuable data remains siloed and inaccessible to researchers and developers. Although the IndiaAI Mission has begun releasing datasets, progress has been sluggish.
Talent represents another significant challenge. While India produces numerous coders, it trains few specialists in cutting-edge AI research. A 2022 study by American think-tank MacroPolo revealed that only one-fifth of India's top AI researchers remain in the country, with most migrating abroad, primarily to the United States.
Harshit Joshi, an AI researcher of Indian origin at Stanford University, explains that the appeal of working overseas lies in easier access to resources and opportunities to collaborate with world-leading experts. He acknowledges that remaining in India would have meant confronting "the fear of missing out" on groundbreaking research.
Cultural and Strategic Hurdles
Those AI professionals who do remain in India often work at the Indian branches of American tech giants like Google and Microsoft, which operate some of the country's best-funded AI laboratories. However, their presence has not yet catalyzed a thriving local ecosystem.
Kailash Nadh, Chief Technology Officer at fintech firm Zerodha, suggests that India lacks a culture of patient, long-term research. "There is a lack of cohesion between industry and academia," he observes, resulting in sporadic and siloed original research.
India's AI strategy has also emphasized domestic applications, with policymakers frequently discussing making AI "work for India." While this approach could address numerous national challenges in healthcare, education, and other sectors, some experts caution that a narrow domestic focus might limit ambition.
Mr. Suri contends that India needs a "big bet" mindset, recognizing AI not merely as a tool but as a powerful engine for economic growth. The country has witnessed similar technological transformations before, with previous digital revolutions dominated by American technology firms.
India became one of the largest consumers of products from Google, Microsoft, and Meta, giving rise to local champions primarily in e-commerce and fintech. However, few of these companies have expanded significantly abroad. For a nation with aspirations of ascending the innovation ladder, the opportunity presented by artificial intelligence may be too substantial to overlook.
