Global financial markets are intensely focused on artificial intelligence (AI), and this shift is significantly influencing how foreign capital perceives various markets worldwide. According to Ruchir Sharma, Chairman of Rockefeller International and Founder of Breakout Capital, foreign investors predominantly view India as a 'loser' in the ongoing AI race.
Sharma articulated this perspective during an interaction at the Express Adda, emphasizing that unlike the IT boom of the early 2000s, India is currently missing out on the core infrastructure development driving the AI revolution. He noted a "monomaniacal focus" globally on foundational AI components such as semiconductors, memory, and computing power.
India's Infrastructure Gap in AI
Sharma pointed out that the global AI landscape is heavily centered on building this crucial infrastructure, describing it as a "mad dash." Unfortunately, he stated, "India, unfortunately, just doesn't have that in terms of that." This structural weakness is a significant factor shaping foreign portfolio investor (FPI) sentiment, despite recent net inflows into India after weeks of selling.
Dominance of East Asian Tech Giants
To illustrate the disparity, Sharma highlighted the immense market weight commanded by individual companies in countries like Taiwan and South Korea. He revealed that a single Taiwanese company, TSMC, holds a greater weight in the popular MSCI index than all of India combined. Similarly, he noted that the projected profits for Korean giant Samsung this year are expected to surpass those of every American tech company except Nvidia, exceeding even Amazon, Apple, and Alphabet.
Sharma stressed that while domestic enterprises are investing across various layers of AI, from energy and data centers to chips and applications, his observations reflect the prevailing sentiment among foreign investors. He underlined that "the numbers do the talking," indicating that the perception of India's readiness for the AI era is a critical determinant for global capital allocation.
Structural Weaknesses Persist
The Rockefeller International Chairman attributed this sentiment to underlying structural weaknesses that are "well known by now." He clarified that his role was to reflect foreign investor sentiment on India, not to pass judgment on whether current domestic efforts are right or wrong. For developed markets, the US remains a leader, with Japan also making strides, while in emerging markets, Korea and Taiwan have emerged as clear winners in the AI infrastructure race.