The Global Tug of War for AI's Dominance: Start-ups Opine on India's Position

Even though Prime Minister Narendra Modi mentioned in a recent statement that India is making remarkable strides in artificial intelligence (AI), leveraging its potential for public good and national development, the concept of AI for "public good" remains uncertain, as nations are currently in a race to expand their footprints, all of which is still at a nascent stage.

On the geopolitical front, Donald Trump’s return to the White House signals changes that could impact the global structure, of which India is a major part, especially given its status as a US ally. However, one of Trump’s executive orders to deport illegal immigrants, for which India ranks second after Mexico, does not favour the country. Additionally, the US's announcement of the Stargate infrastructure project is seen as an acceleration of global competition in terms of the framework.

Already a trailblazer with OpenAI’s ChatGPT, the U.S. is also seeking a $500 million investment with the Stargate AI. Meanwhile, China has already surpassed OpenAI and other AI models like Gemini and Claude with its Deep Seek AI, in terms of popularity. India is not far behind, as it is already working on a homegrown generative AI. The recently tabled Union Budget for 2025-2026 also allocated space for a new Centre of Excellence for AI in education, with an outlay of Rs. 500 crore.

Talking about the global race, Vijeta Soni, Co-Founder and CEO of Sciative Solutions, says, “India has come a long way in joining the race towards artificial intelligence with the allocation of $100 million towards Generative AI and AI-based infrastructure. Although it is a far cry from the $500 million Stargate AI initiative by the U.S. or the new DeepSeek advances by China.”

In a recent tweet posted on X (formerly Twitter), PM Modi invited global investors to invest in the AI potential of India. While Ms. Soni believes there has been increasing support from investors and a push from the government in favour of Indigenous AI solutions, she also mentioned that Indian start-ups will need to deal with regulatory hurdles, data privacy concerns, and limited infrastructure in this race. 

Where in India in this tug-war?

Citing the most critical challenge as understanding the ethics and lawfulness surrounding the use of AI technology, Ms. Soni opines that AI must be transparent, unbiased, and inclusive. “There are questions that need to be asked and answered regarding biased algorithms, data privacy, and the effect that AI will have on employment,” she says.

Looking towards the future with AI, she adds, “AI has shifted from automation to augmenting human intelligence and transforming industries. From here on, the focus will shift away from just raw computational power towards energy-efficient AI, domain-specific AI solutions, and AI-human collaboration.” Ms. Soni is hopeful that the tug-of-war between countries will ultimately lead to coexistence. “Instead of a winner and a loser, it is likely that we will see AI ecosystems coexisting, with countries and companies excelling in various niche areas,” she adds.

At a time when both the private and public sectors in India are aiming to embrace all technological advancements, Arun Prakash M, Founder and CEO of GUVI Geek Networks, believes India stands out for its focus on creating “meaningful solutions rather than blindly following the steps of the USA and China for AI development, which is not the best move at this time.” “Significant efforts are being made in the background by Indian stakeholders to create a distinctive presence in AI development—something far from large language models (LLMs) like ChatGPT or DeepSeek, but rather a more mature version of GenAI that can be used in diverse use cases while prioritising cost-efficiency, data privacy, and other aspects,” he adds.

For now, Mr. M is hopeful that AI will not lead to job losses in India but will instead create new roles, making old job roles irrelevant. “For example, the emergence of GenAI models has led to new jobs like Prompt Engineers. This means that Indian talent will be required to heavily invest in upskilling themselves, which can not only sustain their professional ambitions but also further them at an unprecedented rate.” Calling AI in its “minuscule stage,” Mr. M says, “We have very little understanding of this technology as of now, and achieving absolute development will require years. This paves the way for revolutionising things that matter the most—healthcare, education, space travel, energy requirements, pollution, and many others. However, we must keep in mind that this is a slow and gradual process, and despite the ongoing developments, it will take a lifetime to reach the goal of absolute AI development,” adding, “This ongoing race for AI advancement between countries is about the search for new-age wisdom and profound developments, and there have seldom been such periods in the history of humankind.”

Agreeing with this, Vineet Singh, the Vice President of Branding and Communications at Pocket FM, an entity that has begun experimenting with AI, says, "India’s start-up ecosystem is evolving at an unprecedented pace, driven by innovation, resilience, and a global vision. AI and automation are not here to replace us but to amplify our potential—helping businesses scale while enabling people to focus on creativity, strategy, and deeper problem-solving." He also adds, "The future belongs to those who can seamlessly integrate technology with storytelling, efficiency with imagination, and ambition with adaptability." "As we embrace AI, our goal should be to make it a force multiplier—enhancing human ingenuity, not replacing it," Mr. Singh states.

'India Might Create 20 DeepSeeks' 

Kickstarted by the U.S., as India becomes involved in the advancement phase of AI, both start-ups and investors are seeking ways to understand its impact on a developing country like India. Bruce Keith, the CEO and Co-founder of InvestorAi, says, "It looked like the large established U.S. tech players had created a beachhead, but the engineering jumps from DeepSeek certainly shook that notion. What is clear is that some element of government backing will make a difference at this stage, and with the success of DPI, India is well placed to create a public infrastructure data and AI ecosystem. To put the government announcement into context, a $100 million commitment is equivalent to around 20 DeepSeeks!"

Commenting on the Union Budget's potential for the development of AI, Mr. Keith says that the budget has done two things for Indian start-ups. "They have let the sector know that they have financial backing, but even more importantly, it was the subtle shift from subsidiser to enabler at the government level. The groundwork is being set, it’s now time for the sector to step up," he states.

As of yet, the threats posed by AI are a hot topic in discussions related to its growing usage, and according to Mr. Keith, the wider societal threats around data safety, copyright, and deepfakes cannot be ignored. "Some of these require legal guardrails and, ironically, others will require AI to help police them," he says.

But where will the global race for AI stop, if it will? Mr. Keith has a poetic way of commenting on it. He says, "Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle: when the sun comes up, you’d better be running!"