As the phenomenon of artificial intelligence (AI) captures the global imagination, with US tech behemoths pouring substantial investments into the sector, many investors in India are gripped by a pervasive trepidation: Are we missing the AI train?
The AI surge this year has profoundly influenced markets worldwide, from the United States to China and Hong Kong.
However, investors in India have faced setbacks due to the country’s relatively modest engagement with AI technologies.
Christopher Wood of Jefferies even labeled Indian stocks a “reverse AI trade,” suggesting that India might excel should the global AI bubble deflate.
Contrarily, Deepak Shenoy, the founder and CEO of Capitalmind, presents a different perspective. He asserts that “AI as a concept is not lost for India.” In fact, India’s seeming belated entry into the AI arena may constitute a strategic advantage.
Insights from the Dot-Com Era
Shenoy draws an intriguing parallel with the dot-com boom of the late 1990s, a period during which India was similarly not an early player. While Silicon Valley was expending capital at unprecedented levels, India quietly developed its capabilities.
“Even during the dot-com frenzy, we were significantly late to that celebration. However, consider this: Today, we boast one of the largest e-commerce markets globally.
It has been 25 years since, and we have adapted and evolved,” Shenoy remarked, suggesting that India’s lack of early participation did not stifle wealth accumulation.
Shenoy firmly contends that AI will establish a footing in India, albeit through a distinct trajectory and perhaps slightly postponed.
The Lakshmi Mittal Analogy
Shenoy employs a compelling analogy to elucidate India’s prospective role in AI: “We are the Lakshmi Mittals of the AI market.”
Much like Lakshmi Mittal amassed a global steel empire by acquiring undervalued assets during economic downturns, India could similarly harness the impending AI collapse.
Shenoy suggests that AI represents a significant theme for India, with local companies positioned to leverage the opportunities it presents.
“This may unfold over the next three to five years — it remains uncertain! However, one must await the construction of the bubble in the US.”
As certain AI enterprises face insolvency, their technologies, products, and intellectual properties will persist — they will merely become more accessible in price. Indian firms stand ready to capitalize on this.
“We may not be poised to inject $200 billion, yet if that technology becomes available for $20 billion, we’ll seize it when the rest of the world is retreating,” stated Shenoy, reiterating, “we are the Lakshmi Mittals of the AI industry.”
He posited that India would acquire valuable assets from potentially bankrupt AI firms, suggesting that such a strategy is wiser than incurring losses in the present.
This year, AI has transcended into a dominant theme. The so-called Magnificent Seven have witnessed a remarkable upsurge in share prices and market capitalization, fueled by the escalating interest in AI. Notably, Nvidia spearheads this rally, having surpassed a market cap of $5 trillion — a historic first.
The upsurge in investments directed towards artificial intelligence, a key driver of global growth, is projected to continue and yield long-term advantages, according to OECD Secretary-General Mathias Cormann.
Shenoy anticipates that AI will remain integral to developments into 2026; nevertheless, he believes that this timeframe is too abbreviated. “It may require four to five years for this entire phenomenon to unfold.”
Source link: Livemint.com.
