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India’s AI Infrastructure Faces Challenges Amid Global Competition

India’s AI ecosystem is struggling to keep pace with global competitors due to a lack of adequate funding and infrastructure. At the Capital Connect 2025 event, venture capitalists and industry leaders pointed out that the country is facing significant hurdles in developing the necessary resources to compete in the global AI race. These challenges include a shortage of high-performance computing power, limited access to GPUs, and insufficient deep-tech funding.

Despite the launch of the IndiaAI mission with a budget of ₹10,371 crore, experts believe that India is still far behind global leaders, particularly China and the United States, when it comes to AI infrastructure development. China’s DeepSeek AI has already made impressive strides in advancing AI technologies, while India’s infrastructure remains in its early stages.

Industry experts emphasize that the country is better suited to focus on AI applications rather than trying to compete directly in infrastructure development. Investors argue that long-term investments are required, suggesting that patient capital and government-backed funds with funding cycles of over 10 years would be crucial for fostering growth in deep-tech sectors.

As India continues to struggle with limited access to AI hardware, industry leaders warn that the gap between India and global AI giants will only grow wider unless there is a shift in policy and investment strategies.

Key issues highlighted include:

  • Lack of AI infrastructure in India
  • Limited access to GPUs and high-performance computing
  • Insufficient funding for deep-tech initiatives
  • Need for long-term investments in AI and research

The government’s efforts with the IndiaAI mission are a step in the right direction, but experts stress that real progress will depend on more focused, strategic investments in deep-tech innovation and infrastructure development.

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