India Can't be US, China's Colony: Amitabh Kant Bats for Sovereign AI Models

The AI race will not be won by those who build expensive models but by those who democratise AI, said G20 Sherpa Amitabh Kant. Citing DeepSeek as an example, Kant noted that despite restrictions imposed by the US, strong engineering and innovation can help India leapfrog in AI development. 

Looking ahead, he expressed hope that future foundational models would be more energy-efficient and cost-effective. Kant also underscored the importance of sovereign AI models in preserving India's history and culture, asserting, "We cannot be colonies of the USA and China."

Kant further highlighted that India's digital economy is not just a sector but the backbone of the country's growth.  He emphasized that traditional GDP measurement methods fail to account for key digital advancements, including AI, fintech, and digital public infrastructure. Kant was speaking at the launch of a report titled State of India's Digital Economy (SIDE 2025) that was launched by the Indian Council for Research on International Economic Relations (ICRIER) and Prosus Services B.V.

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The report says that the US and China account for 80% of venture capital (VC) investments in AI across 32 countries. Meanwhile, India lags with a sixth rank in VC investments for AI in 2024, adds the report. 

The report further indicates that the VC money received by the USA and China has raised the valuation of AI start-ups in the two countries. It says, “VC money chasing startups in these two countries not only pumps up the valuation of startups, it also gives AI companies the much needed financial muscle to build capital intensive AI models.”

Meanwhile, with regards to India, the report says that 2024 saw a resurgence in funding of tech startups after a muted growth in 2023. It further says that DeepTech will become an area of growth for the country with drones, genAI and other areas becoming areas of focus. 

India's rank is the same as last year in terms of the digitalised economy, as per the report. The report indicates that the USA continues to learn the global digital economy with China a close second. 

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The State of India's Digital Economy 2024 highlighted that India is the third largest digitalised economy in the world. The report further indicated that the digital economy of the country would grow to contribute 20% of the country's GDP by 2029-30. It said, " India’s rapid digitalization is being driven by: a large base, high growth, facilitated by DPIs, and strong gender and geographical convergence."

The report also indicated that India's fast-paced digitalization is fueled by a large user base, significant growth, the support of Digital Public Infrastructure (DPIs), and notable convergence in terms of gender and geography.