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India Needs More Than Data For AI Ambitions As China-US AI War Rages

China's gigantic lead in renewable energy may give it an edge for the future and which is why India also needs to double down on its ambitious renewable energy plans.

25 Sep 2025, 10:00 AM IST i
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<div class="paragraphs"><p>India’s growing economy and digital talent pool make it an attractive location for data centre providers and chip production. (Source: Unsplash)</p></div>
India’s growing economy and digital talent pool make it an attractive location for data centre providers and chip production. (Source: Unsplash)
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The world's most valuable company has been mired in the bog of great power conflict. China wants Nvidia's most powerful AI chips but is loath to give Donald Trump a win. The US President blocked chip sales to China earlier this year and later changed course with the caveat that the US government would get 15% of sales proceeds. It was expected that Chinese companies would order tens of thousands of an Nvidia chip specifically made for the China market—definitely not Nvidia’s best—but China's Internet watchdog poured water on those hoping Nvidia’s China sales would swell with a diktat ordering Chinese firms to stop testing the chip and cancel orders.

To add to this, China also ruled that Nvidia violated anti-monopoly laws with a 2020 acquisition of a specialised intelligent networking company, Mellanox. Industry watchers can only speculate on the real strategy at play from behind the Great Wall, but many feel that the moves are designed to push China's own AI chips and build on a domestic stack, and not be restricted to US tech where someone like Trump could turn the tap off on a whim. Some feel China may have caught up with the US on AI chips or is close. And the irony is that for a country that is allegedly behind some of the largest state-sponsored hacks, the fear of backdoors in US tech is a real worry.

I asked R "Ray" Wang, Principal Analyst & Founder, Constellation Research about Nvidia's China conundrum and also what India could learn as we build a Bharat-centric AI stack. Ray's latest book is aptly titled, 'Everybody Wants to Rule the World' though he's talking about the world of business and thriving in the same seas where the Big Tech sharks swim.

Ray feels that China is about 3-5 years away from catching up with the US on the AI chip level, but only around 2-3 years on the software side. He agrees that China does not want its entities creating dependence on US tech and wants to avoid any potential back doors at the core chip level—hence the current cold shoulder to Nvidia.

When it comes to India learning lessons from China's long game in AI, Ray feels that we have to figure which parts of the market we want to own—it could be software, product engineering, embedded systems or devices. And while India might have the largest user base for ChatGPT on the planet, Ray feels that while India has data, we lack chips, and our energy costs are expensive. According to this avid tech watcher who has seen trends come and go and the giants of one generation fall like ninepins in the digital era, one of these needs to be addressed because Indians cannot stay in the AI race with merely data.

In fact, China's gigantic lead in renewable energy may give it an edge for the future and which is why India also needs to double down on its ambitious renewable energy plans, which are already bearing fruit. This is because massive data centres that power AI will need energy at a level many can’t imagine today. As Ray puts it, China has cheap energy and lots of data but needs high performance chips, while the US has lots of chips, good data, but expensive energy and Europe is perhaps the loser here with no chips, limited data, and expensive energy. It’s clear that the US quickly needs to increase its focus on renewable energy, but who will bell the cat in the Trump administration?

While we wait and watch on how all of these battles play out in the larger AI wars, here are some of the key AI-related stories from the past few days. Make sure you haven’t missed any.

Till next week,

Ivor Soans

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