This week, global tech giants Amazon and Microsoft made headlines with a combined investment of over $50 billion in India, signaling a major focus on artificial intelligence (AI). Microsoft CEO Satya Nadella announced the company’s largest-ever investment in Asia—$17.5 billion—to enhance infrastructure, skills, and sovereign capabilities for India’s AI-first future. Amazon followed with a commitment of more than $35 billion by 2030, a portion of which will support AI development.
These investments come at a time when global tech markets are facing uncertainties, with fears of an AI bubble affecting valuations. Analysts, however, see India differently. Christopher Wood from Jefferies described Indian stocks as a “reverse AI trade,” suggesting that India may outperform other markets if the global AI hype declines. HSBC echoed this view, highlighting Indian equities as a hedge amid the ongoing AI rally.
While Indian stocks have lagged behind Asian peers in recent years, these new investments provide a boost. India has been quick to adopt AI, with progress in areas like data centers and chip manufacturing. Intel recently announced a collaboration with Mumbai-based Tata Electronics to produce chips locally. However, India is still catching up in developing a sovereign AI model. Launched about 18 months ago, the government’s AI mission aims to equip start-ups, universities, and researchers with high-end computing power for a homegrown AI model supporting 22 languages. Yet, this $1.25 billion program is modest compared to France’s $117 billion and Saudi Arabia’s $100 billion initiatives.
Challenges remain, from limited semiconductor availability and infrastructure to retaining skilled AI talent. India has a high concentration of AI professionals—2.5 times the global average—but lacks policies to keep top talent from moving abroad. In contrast, China provides financial incentives, tax breaks, and fast-track visas for AI experts.
