“The best way to predict
the future is to invent it.”
— Alan Kay
There are moments in history when entire nations miss a turn, a once-in-a-century opportunity. The Industrial Revolution created Britain. The age of mass manufacturing elevated the United States to superpower status. The electronics revolution transformed Japan. The Internet era produced Silicon Valley. Fast forward to today and it is Artificial Intelligence (AI) that is creating the next great redistribution of wealth, influence and economic power. As trillions of dollars flow into this new frontier, a disturbing question confronts India: Has the country missed the most consequential technological opportunity of the 21st century? The warning signs are impossible to ignore.
Look at Taiwan. This country which is smaller than 19 of India’s states in geographical size and has a population of only 2.3 crore people recently overtook India in total stock market capitalization. That feat was not due to consumption or demographic advantage; it was built on technology. It was built on semiconductors, AI infrastructure and intellectual property. At the heart of the success stands TSMC, a company valued at US $2 trillion, now one of the most important enterprises in the global AI ecosystem.
Discomfiting Contrast
The weigh-off should make India fidget. For years, policymakers and industry leaders have spoken about India’s emergence as a ‘technology powerhouse’. Yet, the technology revolution that will define the future is making India conspicuous by its absolute absence from the list of contenders.
Further, no Indian firm has built any real AI model, let aside a dominant one. There is no Indian equivalent of ChatGPT, Claude, Gemini, DeepSeek or Perplexity. No Indian company sits at the height of AI stardom. No Indian company controls semiconductor supply chains that power AI ambitions worldwide. And when tech firms are adding billions of dollars in market value through AI, India remains a consumer, not a creator.
The monkey in this story is the services trap India has dug for itself. For decades, India spoke of the success of its IT industry. Sure, India’s software companies generated employment, earned foreign exchange, built global reputations and transformed cities. They showed that Indian talent could compete with the best in the world. But success can sometimes become a trap.
India’s business model was based on selling faux-skilled labour, rather than creating intellectual property (IP). Indian firms mastered the art of providing services to global corporations. They became indispensable partners. But what they rarely became was owners of the products, patents and platforms that generated disproportionate value. Artificial Intelligence is here now and it is exposing this limitation.
In the past, global giants needed armies of programmers. But with AI, sophisticated models can write code, test software and automate functions that once justified large workforces. Ironically, the very activities that fuelled Indian IT are those most susceptible to automation today. While Silicon Valley, Beijing and Taipei invested in creating AI products and infrastructure, India happily remained focused on services.
The result is visible in the scoreboard of global market value. Companies creating AI are capturing extraordinary wealth. Companies supplying them with labour are not.
Exporting Minds
A second challenge is one that India knows all too well. Brain drain. India produces the most number of engineers and scientists worldwide, with many of these being raw AI talent. And this talent creates value elsewhere, for others. Indian researchers are building advanced models in American laboratories. Indian engineers occupy top positions in global tech firms. Indian academics contribute to frontier research. Their achievements deserve applause. But there is a difference between producing talent and creating wealth.
When IP is created abroad, the profits, strategic advantages and technological ecosystems remain abroad. Salaries may flow back through remittances, but ownership does not. Nations become rich not by educating talent but by ensuring that talent builds institutions, products and innovations within their own economies. China understood this maxim decades ago. Taiwan figured this out even earlier. South Korea built national champions around it.
India has somehow been unable to force open the high-stakes AI lock.
Infrastructure Deficit
There’s a third reason too for India’s sloth-speed, one barely visible but highly decisive. It is that AI is not merely software. It is infrastructure too. Advanced AI models needs massive computing power, specialised chips, sophisticated data centres and enormous quantities of electricity. The AI race is a contest of capital expenditure. Global tech firms are spending billions on data centres and acquiring computing resources. US firms alone invested US $109 billion in AI-related ventures and startups in 2024, while global private investment in AI crossed US $250 billion.
India traipsed into this race with significant disadvantages. It lacks a meaningful semiconductor ecosystem. Advanced GPUs remain expensive and scarce. Data centre capacity, though growing, trails competitors. Power availability remains a challenge. To top it all, Indian AI startups depend on computing infrastructure on rent from Amazon, Google and others.
This dependency matters. In the industrial age, nations that lacked steel mills could not compete. In the digital age, nations that lack AI infrastructure face a similar limp. One cannot run to the AI future by using crutches in its foundations.
The Late Arrival
The final hurdle is an unpalatable one, that India is too late to the AI circus. Tech revolutions reward early movers disproportionately. Once the ecosystem matures, advantages compound. Capital attracts capital. Talent attracts talent. Innovation attracts further innovation. Companies leading AI today enjoy data advantages, computing advantages, talent advantages and financial advantages. Their valuations allow them to invest aggressively, widening the gap further.
This does not mean India has no future in AI. It does, but not the future many imagine. The opportunity to create the next OpenAI or Nvidia has narrowed. The opportunity to dominate advanced semiconductor manufacturing is harder still. Catching leaders who already possess accumulated advantages will require resources and coordination on a scale India has rarely demonstrated.
Yet, this reality does not necessitate surrender. There are enough stories of countries succeeding not by leading the first phase of a revolution, but by mastering the second.
Beyond Rhetoric
All said, the challenge is not a shortage of talent. Nor is it a shortage of ambition. It is a shortage of clarity. For long, discussions around AI have been dominated by conferences, declarations and grand visions. Those have value, but technological leadership is not achieved through speeches. It is achieved through capital formation, research ecosystems, infrastructure creation and relentless product innovation.
The world is no longer debating whether AI will transform lives. That question has already been answered. The real question is who will own the transformation.
Given current trends, India risks becoming to the AI age what many nations were during the industrial revolutions – suppliers of labour to richer economies, with the latter owning the patents and generating extraordinary wealth. That would be a tragedy because India possesses every ingredient required for success – human capital, entrepreneurial energy, a large domestic market and a vibrant technology culture.
What India lacks is urgency. The threat facing India is not that AI will kill crores of jobs. The danger is that AI will create obscene wealth elsewhere while India twiddles its thumbs in frustration, watching in financial dismay. After all, the most important tech revolution of the 2000s is underway. Nations are choosing their place in it. India has to somehow secure a meaningful role.
The writer can be reached on [email protected]. Views expressed are personal
The writer is a veteran journalist and communications specialist
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