India’s Strategic Approach to AI: Insights from Shri Ashishkumar Chauhan

The global competition in artificial intelligence is often gauged by who controls the largest models, the most advanced processors, and the largest data centers. Yet, Shri Ashishkumar Chauhan, CEO of the National Stock Exchange of India, believes that these metrics may not ultimately decide who harnesses the economic gains effectively.

Chauhan, speaking at Newsweek’s AI Impact Forum webinar on July 27 titled “Is India on the Right Side of the AI Trade?” hosted by Dr. Ranjit Tinaikar, opined that India can achieve a competitive edge by leveraging AI across its businesses, services, and everyday devices, even when the foundational technology is developed elsewhere.

“You don’t have to be inventing something to be the best users,” Chauhan remarked at the webinar.

Tinaikar highlighted concerns from Bernstein, a prominent global equity research and brokerage firm, that India might become a “permanent customer” of AI models developed in other countries like the United States or China. Chauhan responded by reflecting on India’s earlier experiences in technology. He noted that while India did not originate computer chips, operating systems, relational databases, or programming languages, its professionals learned to utilize these technologies and established a global industry focused on problem-solving for foreign firms.

Chauhan sees a similar opportunity in AI. By adopting open models, companies can minimize experimentation costs, and smaller systems can be customized for a wide range of applications such as phones, vehicles, appliances, and industrial equipment, rather than relying solely on massive frontier models.

“The battle of LLMs is over,” Chauhan declared, sharing an opinion he has held since 2025, “mostly open source will win.”

Currently, model developers and infrastructure providers draw the significant portion of investment and attention in AI. Chauhan anticipates the economic value transferring towards the institutions and nations capable of applying AI cost-effectively to practical tasks. India partakes in this competition with its vast workforce in technology services and global capability centers, which already assists in building and supporting systems for international companies, enriching their experience with evolving business processes reliant on AI.

Chauhan suggests smaller models could extend AI processing capabilities to phones and other devices as computation becomes less expensive and customization easier. Open-source technology allows developers to tailor models to local needs without requiring centralized platforms for every task. Large models would continue to cater to highly demanding applications, while smaller, specialized systems manage routine work with countries mastering both systems likely to derive more benefits than those concentrating predominantly on developing large systems.

Chauhan also questioned current approaches to measuring innovation. Responding to Tinaikar’s remarks about India’s relatively low research and development investment, Chauhan pointed out that accounting figures don’t always reflect where technical work occurs. He stated how engineers in India often conduct research for Western companies despite the expenditures and intellectual property appearing in corporate records abroad, with many eventually leaving these companies to create their own ventures.

“India is what I call a bottom-up framework,” Chauhan described.

In this framework, entrepreneurs seize commercial opportunities as they arise, without waiting for a national agenda to dictate capital allocation into particular sectors. Chauhan emphasized that ongoing innovation should remain “frugal” while maintaining “world-class” standards.

Physical infrastructure will also influence AI deployment breadth. Chauhan mentioned India’s ongoing expansion of semiconductor manufacturing capacity, renewable energy, and exploration of nuclear technologies to support data centers and other computing facilities experiencing increasing electricity demands.

Chauhan issued a caution against presuming existing shortages and valuations will persist, noting that extensive funding in data center and semiconductor production may eventually lead to overcapacity if AI revenues don’t meet expectations. His skepticism extends to closed-model AI companies, doubting that a limited group of providers will continuously capture most of the AI-generated value, especially as open-weight systems offer cost competitiveness and allow developers greater latitude in modifying technology.

“It’s going to be a garden with many flowers of different types and not one single type of flowers,” he said.

A diverse array of models would benefit India’s strengths. Without needing to lead in models, chips, and applications simultaneously, the country can create successful enterprises, enhance its technology workforce, and produce goods for international markets. India’s optimal path might be through fields where its technical expertise, cost advantages, and experience offer substantial benefits.

Chauhan’s focus on frugality also influenced his advice for AI entrepreneurs. He encouraged founders to maintain expenditures beneath their income to afford them more time to develop, test, and eventually grow.

“Who is the richest person on earth? The person who spends less than his income,” he concluded.