Is India Getting Left Behind in the AI Boom? What Investors Need to Know

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5 Key Takeaways

• India is not central to the global AI revolution, which could cause its stock markets to underperform for the next decade.
• Innovation, not geography or population, is the key driver of economic prosperity, with the U.S. and China as main AI hubs.
• India lacks cost advantages, infrastructure, and a large base of high-paying consumers needed to compete in the AI era.
• Isolated domestic successes (like drone deliveries) are exceptions and do not indicate broad-based market strength.
• Consistent exit of foreign institutional investors since 2020 signals weak confidence in India's market prospects.

Is India Missing Out on the AI Revolution? What It Means for Your Investments
There’s a lot of buzz about Artificial Intelligence (AI) changing the world, but what does it mean for India and your money? Akshat Shrivastava, a well-known financial influencer and founder of Wisdom Hatch, recently shared some strong views that have got everyone talking. According to him, India is not a key player in the global AI race—and that could spell trouble for the Indian stock market over the next decade.
Why Does This Matter?
Shrivastava believes that real economic growth comes from innovation, not just from having a big population or being in the right place. He points out that throughout history, countries that led in new technology—like the Dutch with shipbuilding, the UK during the Industrial Revolution, or the US with factory automation—became rich and powerful.
He explains that innovation usually works in a “hub-and-spoke” model. There are one or two main hubs (centers of innovation) that drive progress, and other countries benefit by connecting to these hubs. In the 2000s, India did well as a “spoke” in the US-led IT services boom. But Shrivastava warns that this model doesn’t work in the age of AI.
Who Are the AI Hubs?
Right now, the US and China are the main hubs of the AI revolution. They’re pouring money into building powerful computers, energy infrastructure, and research. AI is already changing everything—from how factories work, to space exploration, to personalized education.
Where Does India Stand?
Shrivastava says India is not needed in this new AI-driven world. Why? India doesn’t have the low energy costs or the ability to build massive factories that AI needs. Plus, most Indians don’t have the high incomes to make India a big market for expensive AI products.
He admits that some Indian companies, like Zomato with its drone deliveries, are doing exciting things. But he warns these are rare exceptions, not signs of a booming tech economy.
What About the Stock Market?
Shrivastava’s biggest warning is for investors. He points out that foreign investors have been pulling money out of Indian stocks since 2020. If India isn’t a major player in AI, he believes the stock market could struggle for the next ten years.
The Bottom Line
While India’s standard of living may still improve as the world gets richer, Shrivastava thinks we’ll fall behind compared to countries leading the AI charge. For investors, it’s a wake-up call: pay attention to where the real innovation is happening, because that’s where the money will flow.

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