India’s DeepSeek Moment? 5 Powerful Reasons Why India Will (or Won’t) Beat China in the AI Race

India is steadily advancing toward building its own version of DeepSeek, inspired by China’s success with affordable, efficient AI models. Experts like Kunal Bahl believe that a public-private partnership could help India achieve this goal within the next 4–5 years. The country is making major strides in semiconductor manufacturing, with its first homegrown chip expected by 2027. Tech giants like Reliance, Tata, and Infosys are leading the AI charge, supported by collaborations with U.S. firms like Nvidia and OpenAI. The Indian government is backing this momentum through its ₹10,300 crore “India AI Mission.”

However, concerns remain over India’s historical reliance on foreign tech and its relatively low investment in foundational technologies. Analysts warn that this could hinder India’s global competitiveness in AI. Despite challenges, India’s youthful workforce, growing infrastructure, and increased awareness of AI’s strategic importance could still position it as a global AI powerhouse.

India’s DeepSeek Moment? 5 Powerful Reasons Why India Will (or Won’t) Beat China in the AI Race

China’s recent launch of DeepSeek, a cost-effective, locally developed AI model, has sparked global interest in whether India can follow suit. With its vast tech-savvy population and expanding digital infrastructure, India is now under the spotlight as a potential contender to challenge global AI leaders like OpenAI and Anthropic. According to Kunal Bahl, co-founder of Titan Capital and Snapdeal, India could launch its own AI platform within four to five years—but success hinges on strong collaboration between the government and private sector.

Building a Self-Reliant Tech Ecosystem

A critical focus for India is reducing its reliance on foreign semiconductor technology. Commerce Secretary Piyush Goyal recently revealed that India plans to produce its first domestically manufactured chips within two years. Major corporations like Reliance Industries are stepping up, with plans to build one of the world’s largest data centers in Gujarat. Global chipmakers like Micron and AMD have already begun investing in India, while Nvidia’s CEO Jensen Huang announced a partnership with Reliance in 2024 to co-develop AI solutions using Nvidia’s advanced Blackwell chips.

However, challenges loom. The U.S. government’s new “diffusion rule,” which restricts exports of cutting-edge chips, could slow India’s progress unless policy shifts occur under future leadership. This makes India’s push for chip independence not just strategic—but urgent.

Key Players Driving India’s AI Ambitions

India’s corporate giants—Reliance, Tata Group, Adani, TCS, and Infosys—are spearheading efforts to develop industry-specific AI tools and build large-scale infrastructure. These companies are viewed as potential “hyperscalers” with the scale and resources to support national AI goals. For example, Reliance’s collaboration with Nvidia aims to develop AI-powered solutions for sectors like healthcare and education.

Global players like OpenAI are also watching closely. During a visit to India, CEO Sam Altman met with IT Minister Ashwini Vaishnaw to explore partnerships in building a robust AI ecosystem that spans hardware and software.

The government is backing these efforts through the “India AI Mission,” a ₹10,300 crore ($1.2 billion) initiative over five years focused on boosting research, infrastructure, and talent development. Plans include AI computing centers, funding for startups, and academic programs to support long-term growth.

Hurdles on the Path to AI Leadership

Despite the momentum, analysts caution that India faces several roadblocks. Venugopal Garre of Bernstein Research notes that India’s historic reliance on foreign technology—unlike China, which developed homegrown alternatives to platforms like Google and Facebook—could limit progress. Building foundational technologies like semiconductors and cloud infrastructure requires significant investment, time, and strategic alignment.

Job displacement is another growing concern. Former Blackstone India head Akhil Gupta warns that AI could worsen unemployment in a country already facing a 7.6% jobless rate. Roles in IT, customer service, and data entry are especially vulnerable, raising tough questions about how to balance innovation with economic stability.

Opportunities in a Young, Digital-First Nation

India’s biggest strength lies in its demographics and digital momentum. With 65% of the population under 35 and a digital economy projected to reach $1 trillion by 2030, the country boasts a vast talent pool and a sizable market for AI-driven services. Startups like Krutrim and Sarvam AI are already building models tailored to Indian languages and local challenges, including healthcare diagnostics and agricultural tools.

Neil Shah of Counterpoint Research emphasizes that AI’s early-stage development leaves plenty of room for late entrants to make their mark—just as Google did in the early days of search engines. India’s focus on affordable, scalable solutions may offer an edge in sectors like education, public health, and rural development.

The Road Ahead

India’s AI journey is a blend of promise and pressure. While the country still lags in foundational tech, initiatives in chip manufacturing, corporate investment, and public funding reflect a growing national commitment. Long-term success will depend on sustained collaboration, smart policymaking, and efforts to mitigate the social risks of disruption.

As Akhil Gupta aptly puts it, “India is still far behind, but there’s a growing realization that it needs to catch up—and fast.” With the right balance of innovation, investment, and inclusivity, India could very well emerge as a global AI powerhouse, reshaping its economy and technological future for generations to come.