India Bets $1.1 Billion on AI as Tech Giants Descend on Mumbai Summit

India Bets $1.1 Billion on AI as Tech Giants Descend on Mumbai Summit

India announced a $1.1 billion state-backed venture capital fund for artificial intelligence and advanced manufacturing startups this week, as the country hosts a four-day AI Impact Summit drawing executives from OpenAI, Anthropic, Google, Microsoft, and Nvidia to Mumbai.

The summit, which expects 250,000 visitors through Friday, represents India's most aggressive push yet to position itself as a global AI hub—even as venture capitalists at the event warn that the country's massive IT services sector faces potential obsolescence from the very technology being celebrated.

The fund announcement came as OpenAI CEO Sam Altman revealed that India now accounts for more than 100 million weekly active ChatGPT users, second only to the United States. Altman also said Indians represent the largest student user base for ChatGPT globally, underscoring the country's role as both a major AI consumer market and talent pool.

Alphabet CEO Sundar Pichai, Anthropic CEO Dario Amodei, Google DeepMind CEO Demis Hassabis, and Reliance Chairman Mukesh Ambani are among the attendees. India's Prime Minister Narendra Modi is scheduled to deliver a speech with French President Emmanuel Macron on Thursday.

The summit has already catalyzed significant deal activity. Blackstone acquired a majority stake in Indian AI infrastructure startup Neysa as part of a $600 million equity fundraise, with participation from Teachers' Venture Growth, TVS Capital, 360 ONE Asset, and Nexus Venture Partners. Neysa plans to raise an additional $600 million in debt and deploy more than 20,000 GPUs to support AI workloads.

Separately, Bengaluru-based C2i, which develops power solutions for data centers, raised $15 million in a Series A round led by Peak XV, with participation from Yali Deeptech and TDK Ventures. The investment reflects growing recognition that AI infrastructure requires not just computing power but also energy solutions to support it.

Yet even as India courts AI investment, prominent voices at the summit delivered sobering warnings about the technology's impact on the country's economic engine. Vinod Khosla, founder of Khosla Ventures, told the Hindustan Times that industries like IT services and business process outsourcing "can almost completely disappear" within five years because of AI. He referenced the potential impact on 250 million young Indians, though his full comments were cut off in available reports.

HCL CEO Vineet Nayyar echoed these concerns, stating that Indian IT companies will need to focus on turning profits rather than being job creators—a significant shift for an industry that has long positioned itself as a major employer. His comments come as Indian IT stocks have declined amid growing fears that AI will disrupt the services sector that has been central to India's economic rise.

The tension at the summit captures a broader dilemma for finance leaders: the same AI capabilities that promise efficiency gains also threaten to upend established business models and labor markets. For India, the stakes are particularly high. The country's IT services industry has been a cornerstone of its modern economy, and the prospect of AI rendering much of that work obsolete raises questions about how quickly the new AI-focused investments can offset potential job losses.

The presence of major AI labs and cloud providers suggests they view India as critical infrastructure territory—both for its engineering talent and its massive user base. Whether India's $1.1 billion bet can transform the country from an AI consumer market into an AI innovation hub remains the central question as the summit continues through the week.