Economies are changing at an unprecedented rate as we start a technological revolution. The adoption of artificial intelligence will accelerate this change. In countries all over the world, governments and businesses are racing to establish their ability to use and develop foundational artificial intelligence capabilities. India is currently dependent on using available technologies rather than creating its own foundational systems. The issue of dependency creates many strategic and economic questions, especially given that India has significant advantages in terms of talent, scale, and digital infrastructure.
However, India continues to experience difficulty developing and maintaining leadership positions in foundational artificial intelligence development. Therefore, India is at risk for long-term technological dependence on other nations. The issue goes beyond innovation; there are concerns around India’s continuing ability to be economically sovereign. As more and more of the economy is influenced by artificial intelligence in terms of productivity, security, and global power, leadership in the artificial intelligence industry will continue to have strategic implications. India is aware of this trend; however, it has significant structural limitations that hinder its ability to compete effectively for leadership in the global artificial intelligence race.
The competition for global artificial intelligence continues to grow, with major world economies increasing their investments in this area, while India remains focused on building applications on third-party platforms. As a result, India’s current position within the artificial intelligence ecosystem is defined by the use of developing applications on third-party platforms.
India AI Structural Gaps Limit Core System Development
Artificial intelligence requires a vast amount of computing power and investment to develop. Much of the capital for research and infrastructure in AI is coming from companies that lead in their particular market. Advanced models of AI can only be developed using the combination of high-performance silicon and data centers that can provide access to very large amounts of data; however, India has limited chip manufacturing capabilities, and large portions of computing infrastructure in India come from overseas.
Therefore, performing large-scale experimentation is very expensive. The other major block to building long-term AI research programs in India is the very limited amounts of private investment available for Deep Tech, and the excessive focus Venture Capitalists have on early-stage consumer sales-focused start-ups; therefore, long-term AI research suffers due to a lack of funding for the long term. Furthermore, the collaboration level between academia and industry is very low; academic institutions do not have access to enough resources to support high-quality research, and as a result, global companies have been able to attract the best AI talent from India. Consequently, India is building applications without the foundational models required to support them.
Policy, data, and ecosystem challenges slow innovation momentum
Coherent policy frameworks and incentives are required for AI leadership, and the country of India has made significant strides in supporting the development of AI through new government initiatives. The challenge is that implementation tends to lag behind many other countries competing in the same field. Regulatory uncertainty further complicates long-term investment decisions around developing AI systems. Enough data is required to develop models, and even though available data from India continues to grow, there is still no clear structure as to how that data can interact with itself.
Privacy issues, in addition to this, make it very difficult to utilize data to develop new models. Global companies already possess vast proprietary databases, creating an imbalance in their ability to pave the way for new models. As a result, start-ups continue to rely on other companies’ API and Infrastructure to develop their models; consequently, innovation will continue to take place outside of the established four-walled Ecosystems of India. Public sector procurement also does not typically support any technology that has not been previously proven; thus, the amount of demand domestically for developing advanced AI systems will continue to be limited.
Global competition and platform dominance shape India’s position
Currently, global giant tech firms control the majority of the foundational AI development. The major frontrunners in the race are the U.S. and China since they hold the infrastructure, talent, and financial resources. They are also the ones determining the standard for the global AI ecosystem. India is accessing assistance from these AI platforms by being a large user base, but it is only able to use the existing global models to create services on top of them. The challenge for India is that being dependent on these platforms decreases its strategic independence over time. The countries that do not have control over the core models are going to be at risk of becoming digitally dependent. India’s strategic dilemma is whether to focus on consuming the core models or on developing capabilities.
India AI Ecosystem Needs Long-Term Strategic Shift
India needs to regularly invest in deep tech infrastructure. A public-private partnership is required to collaborate more on deep tech initiatives. Support long-term financing for foundational research projects. Policy should provide for a culture of risk-taking and innovation. Strengthening semiconductors/computing capabilities is an immediate need for India. Attracting/retaining talent should be combined with expanding educational opportunities. Establish data governance frameworks that support responsible access. All domestic platforms must scale to be a competitor globally. India has all the pieces to be a global leader in AI; it must develop a cohesive plan for successful strategy, investment, and execution.
The bigger question is, what does the digital future of India look like? Will India move from being a consumer to a producer of technology? Or will its future be determined by global leaders in AI?
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