'India isn't needed in AI race': Startup founder warns of tough decade for stock markets
The AI era is being shaped by the U.S. and China as the primary innovation centres.
- Aug 3, 2025,
- Updated Aug 3, 2025 1:24 PM IST
The next decade could prove difficult for Indian stock markets, according to finance educator and Wisdom Hatch founder Akshat Shrivastava, who argues that India is increasingly irrelevant in the ongoing global AI race.
"The next 10 years are going to be challenging for Indian Stock Markets. Why? SHORT-ANSWER: because India is not needed in the AI race," Shrivastava said in a post on Sunday.
He outlined how technological innovation has historically shaped global economic power-from Dutch shipbuilding to British industrialisation to American factory automation. "It is the 'innovation' which creates new wealth. Wealth does not appear out of thin air. It is systematically built on the back of technological innovation," he said.
Shrivastava explained that global tech advancement tends to follow a hub-and-spoke model, with 1–2 dominant innovation hubs surrounded by secondary beneficiaries. He said India was able to benefit from this model in the past two decades as a spoke to the U.S. tech ecosystem, supporting Fortune 500 companies with IT services from hubs like Pune and Bengaluru.
But the AI era, he said, is being shaped by the U.S. and China as the primary innovation centres. "This is the new arms race," Shrivastava said. "China has already built massive energy reserves (US is catching up). US has already built massive tech reserves (and one could argue China is catching up)."
He questioned India’s positioning in this new global order: "Why is India needed in this AI race? Data harvesting? (well, this stage is already done). Can we lower the cost for AI infrastructure? (we have very high cost of energy and poor leakages in infra; so we can't). We can't build giga-factories."
He added that India doesn’t present an attractive consumption market either. "Getting users to pay 20$/month is a challenge for LLMs right now," he said, referencing India’s low per capita GDP.
While acknowledging that productivity gains elsewhere will raise India's living standards too, Shrivastava warned of relative stagnation. "Compared to other countries, it will fall," he said.
He noted that India may still see localised growth stories - like Zomato adopting drone deliveries - but the country "is nowhere close to becoming a hub of innovation." He blamed "decades of regressive economic policies, unnecessary pride and inability to look at things rationally" for India's current lag.
"All this will reflect into the stock market. There is a reason why since 2020: FIIs have been consistently exiting our markets," he concluded.
The next decade could prove difficult for Indian stock markets, according to finance educator and Wisdom Hatch founder Akshat Shrivastava, who argues that India is increasingly irrelevant in the ongoing global AI race.
"The next 10 years are going to be challenging for Indian Stock Markets. Why? SHORT-ANSWER: because India is not needed in the AI race," Shrivastava said in a post on Sunday.
He outlined how technological innovation has historically shaped global economic power-from Dutch shipbuilding to British industrialisation to American factory automation. "It is the 'innovation' which creates new wealth. Wealth does not appear out of thin air. It is systematically built on the back of technological innovation," he said.
Shrivastava explained that global tech advancement tends to follow a hub-and-spoke model, with 1–2 dominant innovation hubs surrounded by secondary beneficiaries. He said India was able to benefit from this model in the past two decades as a spoke to the U.S. tech ecosystem, supporting Fortune 500 companies with IT services from hubs like Pune and Bengaluru.
But the AI era, he said, is being shaped by the U.S. and China as the primary innovation centres. "This is the new arms race," Shrivastava said. "China has already built massive energy reserves (US is catching up). US has already built massive tech reserves (and one could argue China is catching up)."
He questioned India’s positioning in this new global order: "Why is India needed in this AI race? Data harvesting? (well, this stage is already done). Can we lower the cost for AI infrastructure? (we have very high cost of energy and poor leakages in infra; so we can't). We can't build giga-factories."
He added that India doesn’t present an attractive consumption market either. "Getting users to pay 20$/month is a challenge for LLMs right now," he said, referencing India’s low per capita GDP.
While acknowledging that productivity gains elsewhere will raise India's living standards too, Shrivastava warned of relative stagnation. "Compared to other countries, it will fall," he said.
He noted that India may still see localised growth stories - like Zomato adopting drone deliveries - but the country "is nowhere close to becoming a hub of innovation." He blamed "decades of regressive economic policies, unnecessary pride and inability to look at things rationally" for India's current lag.
"All this will reflect into the stock market. There is a reason why since 2020: FIIs have been consistently exiting our markets," he concluded.