Two years after OpenAI launched ChatGPT, artificial intelligence has advanced rapidly worldwide. China’s DeepSeek has disrupted the AI market by developing powerful models at a lower cost. The US continues to dominate with massive investments in AI research and development. Meanwhile, India is still trying to create its own foundational language model. This has raised concerns about the country’s ability to compete in the AI race.
India’s Government Promises a Homegrown AI Model
The Indian government says it is working on a domestic AI model. Officials have provided startups, universities, and researchers with thousands of advanced computer chips to help build one within ten months. This push aims to strengthen India’s role in the AI sector.
OpenAI CEO Sam Altman, who was once skeptical about India’s AI capabilities, recently acknowledged the country’s potential. India is now OpenAI’s second-largest user base. Microsoft has committed $3 billion to developing AI and cloud infrastructure in the country. Nvidia’s CEO Jensen Huang has also praised India’s technical talent and its potential for AI growth.
There are over 200 Indian startups working on generative AI. The country has a strong base of software engineers, many of whom contribute to global AI projects. However, despite these advantages, India still faces major obstacles in competing with China and the US.
India Is Falling Behind in AI Development
Experts warn that India is already four to five years behind China and the US. Both countries have invested heavily in AI research, military applications, and academic programs. India ranks in the top five on Stanford’s AI Vibrancy Index, but it lacks the infrastructure, investment, and policies needed to compete at the highest level.
Between 2010 and 2022, China secured 60% of global AI patents, while the US had 20%. India received less than 0.5%. AI startups in India also struggle to attract private investment. In 2023, Indian AI companies raised only a small fraction of what their US and Chinese counterparts secured.
The Indian government has allocated $1 billion for AI development. This is small compared to the US government’s $500 billion investment in its Stargate AI infrastructure plan or China’s $137 billion AI strategy. While DeepSeek has shown that AI models can be built using older chips, India still faces a shortage of long-term investment in the sector.
Another problem is the lack of high-quality, India-specific datasets. AI models need large amounts of data to function effectively, especially for regional languages like Hindi, Marathi, and Tamil. Without this, India cannot develop AI models suited to its diverse linguistic population.
Brain Drain and the Struggle to Retain AI Talent
India has no shortage of AI talent. The country contributes 15% of the global AI workforce. However, many skilled professionals leave India to work in countries with better research opportunities and higher salaries. According to Stanford research, this trend weakens India’s ability to make breakthroughs in AI.
India has a $200 billion outsourcing industry and a vast number of coders. But instead of focusing on AI research, most of the IT industry remains centered on providing low-cost services to foreign companies. This has left startups to take on the challenge of AI development without strong support from major corporations or universities.
A collaborative effort between the government, industry, and academia helped India build a successful digital payments system with the Unified Payments Interface (UPI). Experts believe a similar approach is necessary for AI. Without it, India may struggle to create a competitive AI model.
Can India Still Catch Up?
Some experts believe India can close the gap by using open-source AI models. Bhavish Aggarwal, founder of AI startup Krutrim, has suggested that India should leverage platforms like DeepSeek to speed up development.
Technology analyst Prasanto Roy, however, remains skeptical. He believes India’s ten-month target for a homegrown AI model is unrealistic and simply a reaction to DeepSeek’s rapid rise. He predicts that India won’t have a model as powerful as DeepSeek for several years.
To ensure its independence in AI, India must increase investment in AI research, expand its semiconductor manufacturing, and develop its own computational power. Without these steps, the country risks remaining dependent on AI imports and could face challenges if geopolitical tensions lead to restrictions on foreign AI technologies.
India has the talent and ambition to succeed in AI. But without urgent action in policy, research, and investment, it may struggle to compete with the US and China. The next few years will be critical in determining India’s role in the future of AI.
For the latest updates on AI and technology, visit Wallstreet Storys.
