Big tech bets big on AI – but can India keep pace in the global race?

BBC:

This week, tech giants Amazon and Microsoft pledged an eye-popping $50bn-plus combined investment in India, putting artificial intelligence (AI) in the spotlight.

Microsoft’s Satya Nadella announced his company’s largest investment ever in Asia – $17.5bn (£13.14bn) – “to help build the infrastructure, skills, and sovereign capabilities needed for India’s AI-first future”.

Amazon followed suit, and said it was putting in more than $35bn in the country by 2030, with an unspecified chunk of that investment going into boosting AI capabilities.

The announcements come at a particularly interesting juncture.

As fears of an AI bubble swept global markets and tech stock valuations soared, several leading brokerages took a contrarian view on India’s AI landscape.

Christopher Wood of Jefferies said the country’s stocks were a “reverse AI trade”. That basically means India should outperform other markets in the world “if the AI trade suddenly unwinds” – or simply put, the global bubble bursts.

HSBC also held a similar view, saying Indian equities offered a “hedge and diversification” for those uneasy with the ongoing AI rally.

This comes as Mumbai stocks have lagged behind their Asian peers over the past year, with foreign investors moving billions into Korean and Taiwanese AI-driven tech companies in the absence of comparable opportunities in India.

In this backdrop, the Amazon and Microsoft investments provide a much-needed fillip – yet it remains worth asking where India truly stands in the global AI race.