In the backdrop of global technological advancements, a global AI race is currently underway. Almost all major countries of the world are making substantial investments in AI development to take the lead in this race.
Chinese AI start-up DeepSeek’s groundbreaking success has further intensified this race. Countries are making significant investments in AI infrastructure and technology research and development to replicate DeepSeek’s growth and impact, and to capitalise on this technology.
AI in Budget 2025
India has officially positioned itself as a key participant in this race with fresh allocations of DeepTech fund of funds in the Union Budget 2025. This fund of funds will be explored by the government to catalyse the next generation startups as a part of this initiative.
"The proposed DeepTech Fund of Funds is a timely and promising initiative, especially amid the global AI race. For India to achieve its USD 10 trillion economy goal by 2032, growth must be driven by innovation, not by replicating existing models. DeepTech startups, with their potential to address critical challenges in climate, healthcare, food security, and national security, require patient capital and long-term support. The fund's effectiveness will depend on detailed guidelines that support long-tenured investments, enabling startups to realise their transformative potential fully," said Ankur Bansal, MD, BlackSoil.
In order to boost technological research in IITs and IISc, the finance minister also announced to provide ten thousand additional fellowships under the PM Research Fellowship scheme. She also promised to provide enhanced financial support to empower this research initiative. This move will increase the contribution in technological research, which will further empower development in DeepTech.
“The Deeptech Fund of Funds and the 10,000 fellowships for tech research at IITs and IIScs under the PM Research Fellowship Scheme will help bridge the gap between education and employability while creating a robust pipeline for homegrown AI-led technological breakthroughs. By integrating AI into education at scale, India is not only addressing existing challenges in the education system but also equipping students with the digital and analytical skills necessary for the modern economy,” Sunil Gupta, Co-founder, Yotta Data Services said.
As AI is still in its experimental stage, research plays a foundational role in the development of any significant AI technology that has the merit to create global impact. The budget 2025 also promises an additional Rs 20,000 crore allocation to the previously announced private sector driven Research, Development and Innovation initiative.
Through all of these fresh allocations and initiatives, AI technology has finally taken the front stage in national development contribution.
AI in Economic Survey
The government recognises the importance of AI in automating many tasks that people used to do in both public and private sectors. At the same time, it also warns about the possible risks of AI. The Economic Survey 2025 states that AI’s impact on jobs is especially significant in India because of its large population and low average income.
The survey stresses that if companies do not use AI responsibly considering its effects on jobs, ethics, and society, the governments may have to step in with rules and policies.
Global AI Race
Almost all major economies of the world are investing heavily on AI technology. The US is one of the strongest players in the global AI market. Most of the global AI giants like OpenAI, Anthropic, Perplexity, Databricks and xAI are all operating from the US.
Recently, Donald Trump announced a $500bn investment over the next four years to build artificial intelligence (AI) infrastructure in the United States of America. This venture, known as ‘Stargate,’ will be backed by Japanese conglomerate Softbank, cloud giant Oracle, and generative AI pioneer OpenAI.
The United Kingdom which used to be against AI adoption has now flipped its stance and is planning to systematically invest in the technology. UK Prime Minister Keir Starmer recently released an AI Opportunity Action Plan that aims to make Britain a world leader in artificial intelligence.
Previously, the UK government in an official statement said that Starmer is throwing the full weight of Whitehall behind this industry by agreeing to take forward all 50 recommendations set out by Matt Clifford in his game-changing AI Opportunities Action Plan.
