US, China Lead AI Race. Where India Stands And What's Really At Stake

For the last three years, the artificial intelligence race has largely been defined by one question: Who has built the smartest large language model?

The United States has raced ahead with OpenAI's GPT, Google's Gemini, Anthropic's Claude and Meta's Llama. China has responded with DeepSeek, Qwen, ERNIE and several other homegrown models. France has put Mistral on the global AI map.

India, despite being one of the world's largest software talent hubs and home to the biggest base of ChatGPT users by weekly active users, is still searching for a globally recognised frontier AI model.

So, has India already fallen behind? More importantly, does it even need to win the same race?

Experts say the answer is more nuanced than a simple yes or no.

Yes, India Trails US & China, But That's Only Half The Story

Saket Dandotia, co-founder and CEO of Onetab.ai, says there is little point pretending India is on par with the world's AI leaders.

He points out that frontier AI models require enormous computing power. Training one competitive model today demands cluster-months on more than 10,000 H100-equivalent GPUs, costing hundreds of millions of dollars.

By comparison, India's Rs 10,372-crore IndiaAI Mission has committed roughly 34,000-38,000 GPUs across all participating startups. According to Saket Dandotia, that is still far below what a single frontier AI laboratory can consume during one major training run.

"If the yardstick is whether India has built something that tops the GPT or Gemini leaderboard, the gap is real," he says.

But that is not the complete picture.

Over the past 18 months, India has quietly built an AI ecosystem of its own. Sarvam has trained large language models entirely on Indian computing infrastructure. BharatGen, Tech Mahindra's Project Indus, Gnani.ai and Avataar's Varya have also entered the market with products focused on Indian languages, voice technologies and enterprise applications.

According to Saket Dandotia, several of these systems already outperform much larger international models on Indian language benchmarks.

Their goal was never to build another ChatGPT. Instead, they focused on solving India's multilingual and cost-sensitive AI challenges.

OpenAI's ChatGPT becomes first AI app to reach 1 billion monthly users in just 3 years. (Reuters)

The AI Race Is Changing

Many experts believe the AI competition itself is evolving. The first phase rewarded whoever built the largest and most powerful foundation model.

The next phase may reward whoever can make AI useful in everyday life. "The race has been silently shifting beneath the ground," says Sanajaya G, CTO at VigyanLabs.

He argues that AI is increasingly becoming a contest over deployment, data and infrastructure rather than model size alone.

"The winner will not necessarily be the company with the biggest model. It will be the one that deploys real-world AI at low cost using strong infrastructure and quality training data."

Sanajaya says India is well positioned for that shift. The IndiaAI Mission has allocated over Rs 10,300 crore, nearly 38,000 GPUs are being onboarded, and the country has access to one of the world's largest and most diverse data pools generated by more than 1.4 billion people.

He also notes that India ranks third globally in Stanford University's AI Vibrancy Index, behind only the US and China, driven largely by its AI talent base.

Why India Can't Afford To Sit This Race Out

The debate is no longer just about prestige. Experts argue that AI is becoming critical infrastructure -- just like electricity, telecom networks or cloud computing.

"If the intelligence running your banks, hospitals and government sits on someone else's servers, they decide the price, the rules and even whether you get access," says Saket Dandotia.

He points to recent export restrictions on advanced AI models and chips as evidence that access can become a geopolitical tool. The commercial stakes are equally significant.

Dandotia says the emerging agentic AI market-where AI systems execute complex tasks instead of simply answering questions-is expected to expand rapidly over the next decade.

India already has decades of enterprise IT expertise, deep SaaS capabilities and globally recognised digital public infrastructure such as Aadhaar, UPI and ONDC.

These strengths could allow Indian companies to build AI systems deeply integrated with banking, taxation, government services and regional-language customer support.

If that happens, India could capture a much larger share of the AI value chain instead of merely paying licence fees to foreign platforms.

India ranks 3rd In AI competitiveness after US and China. On AI performance, India ranks 4th globally. (Reuters)

The Bigger Battle Is AI Sovereignty

For Sajeev Viswanathan, former global banker and CEO of New Street Tech, which owns MiFiX.ai, the issue extends far beyond technology.

"The AI race is no longer about who writes the best algorithms. It is about who owns the intelligence that will run economies, governments and societies," he says.

Viswanathan argues that India cannot afford to become "a tenant in someone else's intelligence infrastructure."

He believes AI could contribute anywhere between $550 billion and $1.7 trillion to India's economy over the next decade, while also allowing India to shape future global AI standards and governance instead of simply following rules written elsewhere.

According to him, success should not be measured only by building the biggest language model. It should also mean creating trusted, affordable and inclusive AI systems suited to India's needs.

He warns that countries owning AI platforms will control productivity, intellectual property and future economic value, while those relying entirely on imported AI will continue paying perpetual licence fees.

His vision goes beyond technological independence. He calls it "intelligence independence."

A Uniquely Indian Challenge

Unlike ageing economies in Europe, Japan or parts of North America, India has one of the world's youngest workforces.

That creates a different AI dilemma. Viswanathan says India must adopt AI quickly enough to remain globally competitive without allowing automation to deepen unemployment or inequality.

He argues that India has an opportunity to lead the world in building human-centred AI-systems that improve productivity while expanding opportunity, reskilling workers and ensuring the benefits of AI are shared widely.

In his view, India's ambition should be larger than becoming an AI superpower. It should aspire to become the moral compass of the AI age.

India held an AI Impact Summit in February 2026. (Reuters)

The Cost Of Falling Behind

Kanishk Agrawal, Chief Technology Officer at Judge Group India, believes India should not treat AI as a prestige contest. "The countries leading today are building much more than language models," he says.

"They are building the infrastructure that will power future economies, healthcare, education, governance and defence."

According to Agrawal, India still possesses enormous advantages-one of the world's largest developer communities, multilingual datasets and world-class digital public infrastructure.

However, without sustained investment in research, computing infrastructure and indigenous AI models, India risks becoming permanently dependent on technologies created elsewhere.

That would affect not only innovation but also jobs, intellectual property, cybersecurity and India's ability to influence global AI standards.

So, Where Does India Really Stand?

India is not leading the frontier LLM race. On that front, the US and China remain comfortably ahead. But experts say judging India's AI future only through that lens misses a much bigger transformation already underway.

The country's strength may ultimately lie in building AI that speaks dozens of Indian languages, works on inexpensive smartphones, integrates with UPI, Aadhaar and ONDC, and solves practical problems across banking, healthcare, agriculture and government services.

The first AI race was about building the smartest chatbot. The next one may be about building the most useful intelligence. That is the race India still has every chance to win.