“Very few countries in the world have this natural resource,” said Jensen Huang, Nvidia’s founder and CEO, during a recent fireside chat with Mukesh Ambani, chairman and managing director of Reliance Industries Ltd. (RIL), in Mumbai.
Huang’s excitement reflects his belief that India offers a huge market for Nvidia’s chips, which will power the country’s artificial intelligence (AI) ambitions—and, of course, enhance Nvidia’s shareholder value. Ambani echoed Huang’s optimism, underscoring India’s rise as an innovation hub, fuelled by world-class digital infrastructure, second only to the US and China.
“India is fast becoming an innovation hub for the world,” Ambani said, emphasizing that partnerships with firms like Nvidia and Meta will help develop a skilled workforce capable of delivering AI services globally, making the world “a better place.”
Both leaders also acknowledged the pivotal role of Prime Minister Narendra Modi in driving AI adoption and transforming India into a premier digital society. India’s leadership is reflected in its role as a founding member and 2023-24 Lead Chair of the Global Partnership on Artificial Intelligence (GPAI).
Self-reliance through global partnerships
Despite the enthusiasm, India’s efforts to build a robust homegrown technology ecosystem face both opportunities and challenges. The government’s push aligns with Modi’s vision of Viksit Bharat (Progressive India), aiming to reduce dependency on imports, develop domestic semiconductor manufacturing, and broaden the Digital Public Infrastructure (DPI) framework from payments into healthcare and agriculture.
However, India recognizes that achieving self-reliance requires collaboration with global tech giants. Companies like Google, Microsoft, Meta, Nvidia, and OpenAI are essential not only for driving research and development (R&D) but also for generating employment. India’s AI and quantum computing missions demand cutting-edge infrastructure, making partnerships with firms like Nvidia critical.
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Global tech companies have established a significant presence in India through global capability centres (GCCs). These centres play a vital role in deploying cloud-based public services, advancing smart city projects, supporting digital education, and contributing to global R&D efforts. India also serves as a strategic alternative for firms looking to diversify their supply chains away from China.
Apple exemplifies this trend, exporting nearly $6 billion worth of India-made iPhones between April and September 2024, with expectations to surpass $10 billion by year-end. Meanwhile, Indian companies are leveraging OpenAI’s APIs to build localized generative AI models, accelerating India’s AI ambitions.
Intertwined fortunes
High-profile visits from global tech leaders continue to underscore India’s growing importance. Huang and Meta’s Chief AI Scientist Yann LeCun visited India in October, followed by Microsoft AI CEO Mustafa Suleyman’s scheduled visit on 65 November. These engagements align with India’s aspiration to become a global hub for AI and Generative AI (GenAI) development, with more such visits expected in the coming year.
The mutually beneficial nature of these partnerships is already evident. When OpenAI CEO Sam Altman visited India in June 2023, he sparked controversy by expressing doubts about India’s ability to develop a large language model (LLM) like GPT for $10 billion. His remarks prompted a sharp response from industry leaders Rajan Anandan and C.P. Gurnani, who pledged to prove otherwise. Although Altman later clarified his statement, it catalyzed efforts to build native AI models.
Today, Indian companies have rolled out several models trained in local languages, including Tech Mahindra’s Indus, Sarvam AI’s OpenHathi, Ola’s Krutrim AI, AI4Bharat, CoRover.ai’s BharatGPT, and Sutra by Two Platforms.
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Meta has also deepened its involvement in India. It operates Facebook, WhatsApp, and Instagram—among the largest user bases in the world—and partners with Indian universities to advance research in language processing and healthcare. In collaboration with the Ministry of Skill Development & Entrepreneurship (MSDE), Meta recently launched two initiatives: an AI Assistant for the Skill India Mission and five Centres of Excellence (CoEs) focused on Virtual and Mixed Reality.
During his visit, LeCun expressed admiration for India’s enthusiasm for AI, especially in vertical applications, but noted a lack of world-class research labs outside universities. He urged the Indian government to follow France’s example by establishing local research hubs to retain talent.
Huang, whose company Nvidia is valued at over $3 trillion, stressed the strategic importance of India, given its AI, semiconductor, and quantum computing missions. These initiatives require GPUs, AI accelerators, and quantum processing units (QPUs). At a roundtable with Indian CEOs of US companies in New York, Huang declared, “This is India’s moment.” Nvidia has partnered with Tata Group and Reliance to build AI infrastructure, aligning with Modi’s vision that India “manufacture its own AI—and not export data to import intelligence.”
Regulation meets innovation
India’s relationship with global tech companies reflects both collaboration and tension. Governments worldwide, including India’s, wrestle with issues of regulatory compliance, taxation, data sovereignty, and monopolistic practices. India’s insistence on data localization—requiring companies to store citizen data domestically—mirrors global trends, such as the EU’s Digital Markets Act, which seeks to limit big tech’s influence.
India’s ambition to create a self-sufficient tech ecosystem aligns with efforts to reduce import reliance and address supply chain vulnerabilities. Yet, achieving these goals requires global expertise, particularly in AI and semiconductors. The government has committed ₹10,371.92 crore to its AI mission, focusing on GPU manufacturing through public-private partnerships and developing local language models.
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While India ranks among the global leaders with approximately 2,080 AI firms—Nasscom estimates suggest the figure could exceed 3,000—its $8 billion AI investment trails far behind the US’s $250 billion and China’s $95 billion. Patent filings reflect a similar gap. China leads with 38,000 generative AI patents filed since 2013, compared to the US’s 6,000 and India’s 1,350. However, India’s 56% annual growth in AI patents signals its emergence as a key player.
Semiconductor manufacturing is another national priority. China has raised $47.5 billion for microelectronics, while the US allocated $50 billion to boost domestic chip production. India, too, is advancing with ₹1.25 trillion in planned projects, including a semiconductor fab by Tata Electronics and Taiwan’s PSMC. Although India’s initial focus is on 28 nm chips—less advanced than 5-10 nm nodes—this strategy offers sustainability, as only 2% of global chip production uses sub-10 nm nodes.
Building a win-win future
Governments and tech firms must strike a delicate balance between innovation and public interest. Engaging companies early in policy-making, as demonstrated by India’s success with UPI, can reduce resistance. Encouraging local data centres and enforcing fair competition policies, such as India’s regulation of Amazon and Flipkart, will safeguard market integrity.
Ultimately, building trust and fostering collaboration between governments and tech companies will be critical to driving long-term economic progress. There are no shortcuts—India’s rise as a global tech hub depends on navigating these challenges effectively.
