08 February 2025 : Indian Express Editorial Analysis

1. AI race: what India needs to do

(Source – Indian Express, Section – The Ideas Page – Page No. – 13)

Analysis of the news:

US Semiconductor Investment and the Rise of Open-Source AI

• Just two weeks ago, the US launched the Stargate initiative, committing billions to semiconductor investments.
• This strategic move aims to create 100,000 jobs and establish the US as a leader in AI innovation.
• Meanwhile, a powerful counterforce emerged from another part of the world—DeepSeek, an open-source AI model that challenges proprietary systems with its efficiency.
• With just 200 employees and under $10 million in capital, DeepSeek’s success starkly contrasts with OpenAI’s 4,500 employees and $6.6 billion in funding, demonstrating the disruptive potential of open-source AI.

India’s Role in the Global AI Race

• The global AI race is intensifying, with countries vying for dominance.
• OpenAI’s Sam Altman, who once dismissed India’s AI ambitions as “totally hopeless,” has reversed his stance, advocating for India’s leadership in AI.
• India is uniquely positioned for success, with a young workforce, strong Digital Public Infrastructure (DPI), and a rapidly expanding AI ecosystem.
• The country boasts 420,000 AI professionals, the world’s highest AI adoption rate (92%), and an AI market potential of $17 billion.
• With 240+ Gen AI startups, including Sarvam AI (Indian language models), Niramai (AI-driven breast cancer detection), and BHASHINI (multilingual AI for inclusivity), India is building an AI ecosystem tailored to its needs.

A Decade of Digital Transformation and DPI Success

India has fundamentally reimagined its digital architecture within a decade. Three major achievements highlight this transformation:

1. Financial Inclusion: Bank account penetration skyrocketed from 30% to 80% in just seven years, a feat that the World Bank and IMF estimated would take 47 years. The cost of opening an account dropped from $23 to just 15 cents, making financial services accessible to millions.
2. Digital Payments: India leads the world in real-time payments, processing $568 billion in monthly UPI transactions—49% of global real-time payments. This has not only digitized transactions but also created new economic behaviors and opportunities.
3. Crisis Response: During the pandemic, India instantly transferred $4.5 billion to 160 million people, ensuring direct, leakage-free financial aid. These achievements reflect the robustness of India’s open-source, interoperable digital infrastructure, which has empowered both public and private sector innovation.

The AI Hardware Challenge: India’s Achilles’ Heel

• Despite its strengths in software and digital infrastructure, India faces a critical AI hardware bottleneck.
• GPUs (Graphics Processing Units) are essential for training AI models, but the US AI diffusion rule has placed India under Tier II restrictions, limiting its access to advanced GPUs.
• This severely handicaps India’s ability to train and develop frontier AI models at scale.

To secure technological independence, India must:

• Invest in AI hardware to boost efficiency, reliability, and scalability.
• Develop indigenous chip manufacturing to reduce dependency on foreign technology.
• Attract capital and talent to build a self-reliant AI ecosystem.

The Path to AI Sovereignty: Six Key Strategies

To avoid becoming a technological colony of the US and China, India must adopt a mission-driven approach:

1. Cost-Effective Innovation: Like ISRO, India must create energy-efficient, cost-effective AI solutions.
2. Open-Source Leadership: Encourage a vibrant open-source AI ecosystem that promotes brilliant engineering.
3. Sovereign AI Models: Develop AI systems based on Indian data sets to avoid foreign biases and ensure end-to-end control over AI infrastructure.
4. Multilingual AI Development: Build multimodal AI models that support India’s 22 official languages and numerous dialects.
5. Tier-I AI Partner Status: As a Quad partner, India must demand equal AI access and rights, free from export restrictions.
6. Urgency and Execution: Treat AI development as a national mission, with rapid execution and clear goals.

Conclusion:

• This decade marks a pivotal moment in AI history.
• India is no longer just a service provider—it is on the cusp of becoming a global AI innovator.
• By securing leadership in hardware, software, and open-source AI, India can define the future of artificial intelligence on its own terms.