India's AI Reality Check Reshapes Middle-Power Tech Strategy

India's difficulty in establishing a significant role in the AI sector, highlighted at a recent global summit, marks a critical inflection point. It underscores the immense resource barriers—in compute, capital, and foundational talent—that define the current AI landscape. This reality check signals a hardening of the US-China duopoly, making it exceedingly difficult for emerging powers to compete directly in the high-stakes arena of large-scale model development, despite possessing significant demographic and digital footprints.

This situation puts immense pressure on India's public and private sectors to recalibrate their national AI strategy away from direct LLM competition. The second-order effect is a likely pivot toward creating specialized, sovereign AI solutions for domestic industries and becoming a global hub for AI implementation services. The key challenge now is transforming its vast tech talent from consumers of Western AI into high-value customizers, which will dictate its future position in the global AI economy.