In a world fixated on the AI rivalry between the United States and China, India is quietly scripting a different narrative. “India could be a different kind of AI superpower,” declared The Economist in its latest leaders column, adding, “It won’t look like America or China. It could still be a winner.” This vision sidesteps the zero-sum race for computational dominance, instead leveraging India’s vast population, linguistic diversity, and developer talent to forge an AI ecosystem that prioritizes inclusion and practical utility. While the U.S. churns out frontier models and China deploys state-backed surveillance tech, India is betting on human-scale AI—tools that empower its 1.4 billion citizens to bridge systemic gaps in healthcare, education, and agriculture. One year on from The Economist’s earlier query—can India win at AI?—the evidence suggests it’s not just competing but redefining what victory looks like.
A Data Powerhouse with a Human Touch
India’s AI journey is fueled by its demographic and digital scale. With 759 million internet users in 2024—projected to hit 900 million by 2027—India is the world’s second-largest online market. This generates a data deluge unrivaled in diversity: 22 official languages, over 1,600 dialects, and a billion-plus daily digital interactions across platforms like UPI, which processed 144 billion transactions worth $2.3 trillion in 2024. A BCG survey highlights India’s AI adoption lead: 92% of office workers use AI tools daily, compared to 64% in the U.S. and 71% globally. Crucially, 85% of Indian workers view AI as a job enhancer, not a threat, a stark contrast to Western anxieties over automation.
This optimism is grounded in application. Indian startups like Sarvam AI and Krutrim are building “Indic” large language models that fluently handle Hindi, Tamil, Bengali, and more, addressing a global blind spot where 95% of AI models prioritize English. Sarvam’s Sarvam 1, launched in 2024, supports 10 Indian languages, with training datasets drawn from local sources like news archives and government portals. Meanwhile, India’s ChatGPT user base—14% of the global total, or roughly 28 million monthly active users—grew faster than any other market in 2024, despite a per-capita GDP of $2,485 compared to $81,695 in the U.S.
The Developer Edge
India’s secret weapon is its coder army. GitHub’s CEO, Thomas Dohmke, projects India will surpass the U.S. as the world’s largest developer community by 2027, with 13 million active developers on the platform in 2024, up 33% year-on-year. This talent pool powers a burgeoning AI startup scene: India had 2,400 AI firms in 2024, a 20% increase from 2023, with investments reaching $1.8 billion, per Tracxn. Unlike America’s compute-heavy giants or China’s state-driven enterprises, Indian AI prioritizes software innovation—think lightweight models optimized for low-bandwidth environments or edge devices like $50 smartphones, used by 600 million Indians.Global tech giants are taking note. OpenAI’s Sam Altman is set to announce a $1.2 billion data center in Hyderabad this month, joining Google and Microsoft, which invested $3 billion collectively in Indian cloud infrastructure in 2024. These centers aren’t just for storage—they’re data mines, tapping India’s digital exhaust to train next-gen models. “India’s data is its oil,” says Rajesh Kumar, CEO of Bengaluru-based AI startup Karya. “But the value lies in refining it locally."
Real-World Impact
India’s AI isn’t about moonshots; it’s about solving ground-level problems. In agriculture, where 42% of India’s workforce toils, AI tools like AgNext’s image recognition systems boosted crop yields by 15% for 2 million farmers in 2024 by detecting pests early. In healthcare, startups like Niramai use AI-driven thermal imaging to screen for breast cancer in rural clinics, serving 500,000 women last year at $2 per scan—compared to $200 for traditional diagnostics. Education sees similar gains: Byju’s AI tutors, used by 150 million students, improved math scores by 12% in underserved regions. These aren’t flashy; they’re functional, scaling access where infrastructure lags.
The government is leaning in. The India AI Mission, launched in 2024 with a $1.2 billion budget, aims to build 10,000 GPUs and train 100,000 AI professionals by 2027. Digital India’s Aadhaar and UPI platforms provide a backbone for AI integration, enabling apps like e-Governance portals that translate services into 12 languages, reaching 80% of rural households. “India’s AI is about inclusion,” says Anupam Chander, a Georgetown University tech policy expert. “It’s not building AGI; it’s building tools for the next billion.”
Hurdles and Risks
The path isn’t smooth. India’s digital divide—30% of rural areas lack reliable broadband—hampers scalability. Regulatory lag is another thorn: the 2024 Digital Personal Data Protection Act, while progressive, lacks clarity on AI training data, leaving startups vulnerable to compliance costs. Brain drain persists, with 25% of India’s AI talent working abroad, per LinkedIn’s 2024 data. And there’s the specter of data colonialism: U.S. firms harvesting India’s data could deepen dependency, with 70% of India’s cloud market controlled by AWS, Microsoft, and Google.
Geopolitics adds complexity. India’s neutral stance on global AI governance—evident in its abstention from the UN’s 2024 AI safety resolution—reflects a balancing act between Western and Chinese influences. Meanwhile, domestic critics warn of job displacement in low-skill sectors like call centers, which employ 1.2 million but face AI automation risks.
A New Superpower Model
Yet, India’s trajectory is compelling precisely because it diverges. The U.S., with $24 billion in AI venture funding in 2024, chases frontier models; China, with $15 billion in state-backed AI, prioritizes control. India, with a fraction of that capital, focuses on affordability and scale. Its AI market, valued at $12 billion in 2024 and projected to hit $24 billion by 2027, grows at a 25% CAGR, per NASSCOM. This isn’t about outmuscling rivals but outsmarting them—building AI that serves the Global South’s 4 billion people, not just the elite.
The Economist nails the stakes: India’s model could democratize AI, making it a tool for equity rather than empire. India’s approach should become a case study in truth-seeking tech—pragmatic, inclusive, and grounded in real-world needs. The question isn’t whether India will match America or China’s compute stacks; it’s whether the world will embrace an AI superpower that codes for the crowd. For now, with 900 million users and counting, India’s already writing the code.
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