India's AI Story Is 'All Talk, Little Substance,' Says Bernstein (indiadispatch.com) 11
Investment research firm Bernstein warned Thursday that India faces a "strategic tech crisis" as US technology giants deploy predatory pricing strategies to lock up the Indian AI market. Perplexity Pro launched free for one year to Airtel's 350 million subscribers while OpenAI introduced a $5 monthly India subscription compared to $20 in the United States.
Bernstein analysts described regulatory "double standards" where foreign tech companies receive favorable treatment while domestic companies face what the firm called "crushing rules and government-led 'tech stacks' that make private business unviable." Private AI investment in India totaled $11.29 billion between 2013 and 2024 compared to $471 billion in the United States and $119 billion in China. From the report: When OpenAI, which is reportedly looking to set up a data center in India, announced the plans to launch a new office, it was met with another round of excitement -- "as if Open AI will hire all Indians at hefty salaries," the firm wrote in a note to clients Thursday. Bernstein analysts pour cold water on this excitement, dismissing it as a "repeat of the 90s" and arguing that the hype misses the fundamental power imbalance.
"Anyone, we repeat anyone, can build a data center... This is the start of the dominance of US tech in Indian AI environment ensuring Indian entrepreneurs do not get a fighting chance to stay relevant. They will run on the sidelines - piggybacking on the US foundation models or maybe even the Chinese," they wrote.
Bernstein analysts described regulatory "double standards" where foreign tech companies receive favorable treatment while domestic companies face what the firm called "crushing rules and government-led 'tech stacks' that make private business unviable." Private AI investment in India totaled $11.29 billion between 2013 and 2024 compared to $471 billion in the United States and $119 billion in China. From the report: When OpenAI, which is reportedly looking to set up a data center in India, announced the plans to launch a new office, it was met with another round of excitement -- "as if Open AI will hire all Indians at hefty salaries," the firm wrote in a note to clients Thursday. Bernstein analysts pour cold water on this excitement, dismissing it as a "repeat of the 90s" and arguing that the hype misses the fundamental power imbalance.
"Anyone, we repeat anyone, can build a data center... This is the start of the dominance of US tech in Indian AI environment ensuring Indian entrepreneurs do not get a fighting chance to stay relevant. They will run on the sidelines - piggybacking on the US foundation models or maybe even the Chinese," they wrote.
But... (Score:2)
... what does Bernstain say?
"Investment research firm Bernstein..." (Score:1)
What is it with the Scots always pushing snake oil??
Unrealistic (Score:1, Troll)
Re: (Score:3, Insightful)
Even with that much flowing into the country, look at the barbaric way the majority of their population lives because there is a grand total of zero effort to help out other Indian people by Indian people. They got their money, keep the peasants out of the cities, and "look at me and my clothing and cars and fancy house" is basically the culture over there
That's also the culture over here, except fewer and fewer people can afford those things, and a bunch of upper lower class people have been conned into believing that they are middle class because they're more than one or two paychecks away from being destitute — but still just one serious medical event away from bankruptcy.
Sounds like most of their IT industry (Score:3, Insightful)
The smart indian geeks legged it to europe and north america leaving the idiots behind to create coding companies that give absurdly low estimates for work then absurdly low quality of said work. Luckily most western companies are wising up to this now.
Re: (Score:2)
Every graduating class of MBAs thinks they have the key to finally paying loser devs the summer help wages they deserve.
Wait wait wait, surely I must be the first one to consider the hidden synergies of combining barely qualified indians, LLMs, and CASE tooling!!
We're not much better I remember on this very forum, 20 years ago, someone said FPGA gets trendy every few years as a new batch of grads hear about them. We simply have slightly less bloated egos (slightly) or else we'd naturally assume we should b
Indian staffing firms will not be spared (Score:2, Troll)
AI is already killing the need for indian consulting companies, I'm sure like every cornered group of MBAs they'll make up excuses that the sky isn't as falling as it seems but the whole point of india is a billion studious people with a low cost of living. Even if AI falls far short of it's promises, they'd rather have one qualified domestic FTE wanking 20 bots into story points and binge drinking in the evenings than 20 barely qualified indians with LLMs.
A close friend of mine has been waking up at 2am
Builder.ai (Score:1)
I thought that builder.ai proved that "AI" stood for Actually Indians [techspot.com].
Re: (Score:2)
Amazon's "Just walk out" was also 'Actually an Indian' supported technology. They had a huge center in Salem India where humans did the "automatic recognition" work.
"Anyone, we repeat anyone, can build a data center (Score:4, Interesting)
"Anyone, we repeat anyone, can build a data center" really? with what stable and cheap power, plus water for cooling in a traditionally hot/dry environment struggling to provide water as it is.
The US with it's developed and relatively modern power grid is struggling to provide the power for the data center boom driven by AI... The only nation with relative comfort in the power generation sector that can support this growth is China. And they are shoveling money and resources into adding capacity. India is screwed on this front for at least the next 20 years and that is IF they had a nation level, strategic, massive investment in modernizing and adding capacity to their grid.
India, even if it has viable AI solutions (and not a bunch of techs sitting on the other side of the prompt) to provide willing buyers... is retarded by a lack of infrastructure, domestic $$$ (users/companies to purchase access to the AI service), corruption (bribes are needed for nearly anything), and domestic regulatory red tape that already hinders domestic firms, but is especially hostile to foreign firms. At least China has a way around this- partner with domestic firms and you can operate there, you'll eventually be supplanted by a domestic clone.. but at least you have some foothold there... India - you can't even partner... unless your definition of partnering is handing over all IP/tech rights, and still paying for everything... and hoping to still be involved if the venture becomes successful.... but left holding the bill if/when it goes bust.
On an aside, doubtful the government is keen on replicating the effects AI has had on the job market in tech and other jobs that India relies on heavily. Massive job losses everywhere AI is adopted... What will happen to India when suddenly millions of people are out of relatively well paying jobs? and it won't be 1 or 2 million people... it will be a massive wave of unemployment. They have no short term incentive to see this sector work. Long term, all nations need it - few have the mechanisms/resources to absorb the short term negative effects on society. Ai has the potential to do for the digital age what industrialization did for manufacturing and agriculture.