India in the AI Race: Why Compute Will Decide Power

(Amal Chandra – Observer Research Foundation) India’s artificial intelligence (AI) ambitions are substantial and increasingly visible. The country has emerged as a major hub for AI applications, digital public infrastructure, and large-scale deployment of AI-enabled services. AI adoption across healthcare, agriculture, logistics, education, finance, and governance is accelerating, supported by India’s vast digital population, rich multilingual data, and deep engineering talent. Yet beneath this optimism lies a structural weakness: India remains heavily dependent on foreign computational infrastructure. It has talent, data, and growing demand for AI—but lacks compute capacity commensurate with its ambitions. This gap may prove decisive. The global discourse on AI has largely been dominated by models—oscillating between the promise of large language models, the risks of autonomous systems, and the race towards artificial general intelligence. Governments debate regulation, companies unveil ever-larger models, and investors pour capital into AI applications. But beneath this visible layer lies a deeper strategic reality: AI power is increasingly shaped not merely by who designs the best algorithms, but by who controls the infrastructure that makes those algorithms possible. In the emerging political economy of AI, compute—advanced chips, GPU clusters, hyperscale data centres, high-speed interconnects, cooling systems, and reliable energy—is becoming the primary bottleneck for frontier AI development. Data and algorithms remain indispensable, but unlike data, compute is scarce, capital-intensive, and geographically concentrated. While model architectures can often be replicated, training and deploying frontier AI systems require access to enormous computational resources, industrial supply chains, and power infrastructure. This marks a profound shift in digital power. The internet era was shaped by control over data and platforms. The AI era is increasingly defined by control over compute. – India in the AI Race: Why Compute Will Decide Power