Submission + - Investors Are Abandoning India For Lack of an AI Story (indiadispatch.com)
An anonymous reader writes: Foreign capital has stopped showing up in India just as the global AI build-out is steering investment toward markets with listed exposure to chips, computing infrastructure or foundation models. Net foreign direct investment to India has fallen from 1.5% of its GDP before the pandemic to 0.1%. India took in roughly $5 billion of net FDI cumulatively over the last two financial years against a $44 billion peak in FY21.
Bernstein puts the addressable Indian AI opportunity at $300-450 billion in physical build-out, the data centres, electrical equipment, cooling, cables and civil construction, of which less than half would go to Indian suppliers. The recurring $16-20 billion a year that Indian consumers and businesses will spend on AI services flows out to the global platforms that collect the fees.
Foreign capital today goes to North Asia for AI and semiconductors, Latin America for commodities or Vietnam for the manufacturing that left China during the trade war. India has a large consumer market, strong banks and other companies, but also a high valuation and increasingly no draw of its own.
Bernstein puts the addressable Indian AI opportunity at $300-450 billion in physical build-out, the data centres, electrical equipment, cooling, cables and civil construction, of which less than half would go to Indian suppliers. The recurring $16-20 billion a year that Indian consumers and businesses will spend on AI services flows out to the global platforms that collect the fees.
Foreign capital today goes to North Asia for AI and semiconductors, Latin America for commodities or Vietnam for the manufacturing that left China during the trade war. India has a large consumer market, strong banks and other companies, but also a high valuation and increasingly no draw of its own.