Ruchir Sharma, Chairman of Rockefeller International and Founder of Breakout Capital, recently highlighted a prevailing sentiment among foreign investors: India is perceived as lagging in the global artificial intelligence (AI) race. Speaking at the Express Adda, Sharma noted that this view contrasts sharply with India's success during the IT tech boom of the early 2000s.
According to Sharma, the current global focus on AI is predominantly on building foundational infrastructure. This includes critical components like semiconductors, memory, and computational power – what he termed the 'picks and shovels' of the AI revolution. Unfortunately, India currently lacks significant capabilities in these core areas, a structural weakness that concerns international capital.
India's AI Infrastructure Gap
The global AI landscape is characterized by a 'mad dash' for these essential building blocks. Sharma emphasized that while both state and private enterprises in India are investing across various layers of AI, foreign investors are primarily looking at the fundamental infrastructure. This perspective is reflected in market indices.
"Most foreigners have taken the view that India is a loser in the AI race."
Sharma pointed out a stark comparison: 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 of South Korean giant Samsung this year are expected to surpass those of every American tech company except Nvidia, and exceed Amazon, Apple, and Alphabet.
Winners in the AI Race
In the developed world, the United States is seen as a dominant player, with Japan also making strides. However, in emerging markets, South Korea and Taiwan are widely considered the clear winners of the AI infrastructure race. Their robust capabilities in semiconductor manufacturing and related technologies position them strongly.
Sharma's comments come amid reports of India seeing modest foreign portfolio investor (FPI) net inflows after weeks of persistent selling. He clarified that he was reflecting current foreign investor sentiment, not necessarily endorsing its accuracy, stating that "the numbers do the talking." The implication is that despite domestic investments, the lack of core AI infrastructure is a significant factor shaping global capital's view of India's potential in the AI era.