Founder‑investor Akshat Shrivastava has stirred up discussion on LinkedIn with his latest post, in which he argues that India, despite its tech talent and growing digital economy, is not positioned to be a leading player in the global artificial intelligence race. His reasoning leans on fundamentals of how economies grow and how innovation ecosystems form.
Innovation Creates Wealth — But It’s Hub‑and‑Spoke
Shrivastava starts by tracing history: Dutch shipbuilding, the UK’s Industrial Revolution, and US factory automation — each era’s wealth was built on top of major technological breakthroughs. Innovation, he points out, doesn’t spread evenly; it follows a hub‑and‑spoke model. In this structure, 1–2 hubs (core tech powerhouses) drive progress, while surrounding “spokes” benefit from them.
India in the last two decades has played a spoke role — especially through IT hubs like Bengaluru, Pune, and Hyderabad servicing US Fortune 500 companies.
AI as the New Arms Race — But With Clear Leaders
In his view, AI is the defining tech wave of this generation, akin to the internet boom of the late ’90s. It touches everything from giga‑factories and energy requirements to personalised learning and advanced computing.
But the race, Shrivastava says, is between the US and China: the former leading in technology reserves, the latter in energy and manufacturing scale. This is a high‑capital, high‑infrastructure, high‑talent competition — and they’ve already built deep foundations.
Check his post:
India’s Gaps in the AI Equation
Shrivastava lists three reasons why India isn’t indispensable to this race:
- Data harvest stage is over – India’s large datasets have value, but the key exploitation phase has already happened.
- No cost advantage for AI infra – High energy costs, infrastructural leakage, and lack of giga‑factory capacity limit competitive hardware production.
- Limited premium consumer demand – Low per‑capita incomes make it hard for companies to monetise advanced AI services (e.g., $20/month LLM subscriptions) at scale.
As he frames it, India lacks both China’s strength as a low‑cost producer and America’s strength as a wealthy consumer market.
The Likely Outcome
India will benefit from global AI‑driven productivity gains, Shrivastava notes, but relative to frontrunners, it will lag. Growth will appear in pockets — for example, Indian companies like Zomato using drones for delivery — but the overall economy won’t be steering the AI revolution. This, he adds, is one reason why foreign institutional investors have steadily reduced exposure to Indian equities since 2020.
