Artificial intelligence has moved beyond being a productivity tool to become a core pillar of global economic competitiveness, driving investment, corporate strategy and government policy across sectors ranging from healthcare and finance to manufacturing and cybersecurity.
The rapid expansion of AI has fuelled fresh investment in infrastructure, computing power and advanced semiconductor manufacturing, while governments are weighing how to balance innovation with regulation. In India, policymakers and industry leaders are increasingly focusing on building domestic AI capabilities and reducing reliance on overseas technologies.
The shift has also prompted debate over whether India is investing enough to remain competitive as countries and sovereign investors accelerate spending on frontier AI.
Global Investment Gathers Pace
Google and Alphabet Chief Executive Officer Sundar Pichai has previously described AI as "the biggest platform shift of our lifetimes", saying it could help emerging economies bridge longstanding development gaps if adopted responsibly.
The AI boom has helped lift equity markets in Taiwan and South Korea, with demand for advanced chips driving higher valuations for companies such as Taiwan Semiconductor Manufacturing Co. and Samsung Electronics.
Despite concerns among analysts about elevated valuations in AI-related stocks, global investors continue to back the sector. Sovereign wealth funds including Singapore's GIC, Temasek and MGX participated in Anthropic's $65 billion Series H funding round in June 2026, valuing the company at $965 billion.
"Artificial intelligence is no longer a competitive advantage, but the foundation of modern enterprises," said S. R. Srinivasan, chief executive officer at QodeNext India.
"Globally, organisations are moving beyond AI pilots to large-scale deployment, where the emphasis is on trusted data, intelligent automation and real-time decision-making. Companies that successfully combine AI with connected supply chains will define the next era of operational excellence and business resilience."
Anthropic Chief Executive Officer Dario Amodei has also warned about the pace of AI development, saying the industry is "increasingly close to the country of geniuses in a data centre". Google DeepMind Chief Executive Officer Demis Hassabis compared the arrival of advanced AI with the invention of fire and electricity, saying the technology is advancing at a pace far faster than the Industrial Revolution.
"The impact of AI and advanced technology in financial markets could likely make some of the market-infrastructure firms obsolete, sooner," said Tajinder Virk, founder and chief executive officer of Dealing, a global investment platform.
He said some jurisdictions are ahead of India in adapting to the changing landscape.
Corporate India is also increasing AI spending. A recent BCG report found that three-quarters of chief executive officers in India and Greater China were more confident about AI investment than their counterparts in the U.S., U.K. and Europe.
India Focuses On AI Capability
India's dependence on overseas AI technologies came under scrutiny after the U.S. briefly restricted access to advanced AI models in June, triggering debate over the country's strategic preparedness.
Several experts, including Mohandas Pai, argued that the episode highlighted the need for stronger national ambition and a dedicated annual government fund for AI development.
Lightspeed partner Hemant Mohapatra said capital is not the main constraint for building globally competitive AI companies.
He argued that talent, computing capacity and execution remain the biggest challenges.
Atomicwork co-founder Vijay Rayapati raised concerns over access to frontier AI models, saying, "If your AI team is not made up entirely of U.S. citizens, you are at a competitive disadvantage" when access becomes subject to geopolitical considerations.
Several experts have also argued that the $1.2 billion IndiaAI Mission, which focuses on computing infrastructure, startups, datasets and skills development, remains modest given the scale of global competition.
Regulation And Cybersecurity
AI adoption is also reshaping financial services and cybersecurity.
Reserve Bank of India Governor Sanjay Malhotra used a July meeting with public and private sector bank chiefs to encourage lenders to adopt AI to expand financial access and improve efficiency, while stressing the need for strong cybersecurity, internal controls and safeguards against fraud and misuse of data.
Governments are also tightening oversight of AI-related cyber risks.
The White House launched "Gold Eagle" on July 14 as a federal cybersecurity watchdog. In India, regulators are placing greater emphasis on cyber resilience, operational readiness, AI governance and data protection.
"The emphasis is shifting from prevention to ensuring organisations can withstand, respond to and recover from attacks. As attackers leverage AI to operate at machine speed, defenders must keep pace," said Vaibhav Koul, managing director at Protiviti Member Firm for India.
Rather than introducing a single law similar to the European Union's AI Act, India has adopted sector-specific oversight through the RBI's risk guidelines for finance, the Securities and Exchange Board of India's framework for algorithmic trading and the Digital Personal Data Protection Act.
"Indian enterprises have embraced GenAI at an impressive pace," Koul said.
Growing investor interest in domestic companies such as Sarvam AI reflects confidence in India's AI ecosystem. Industry leaders say the countries and companies that translate AI investment into products and intellectual property, rather than simply spending the most, are likely to shape the next phase of global technological leadership.
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