India’s AI Blindspots

February 20, 2026

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Good Morning. While the India AI Impact Summit navigates the fallout of optics-driven innovation, a deeper policy shadow persists. The choice between becoming a true tech power or a digital storage colony hangs in the balance as coal-fired power fuels data dreams, leaving the nation's sovereign AI potential largely untapped.

Indian equity indices ended on weak note with Nifty around 25,450 on Thursday amid selling across the sectors. At close, the Sensex was down 1,236.11 points or 1.48% at 82,498.14, and the Nifty was down 365 points or 1.41% at 25,454.35.

In other news, global tech leaders and domestic conglomerates commit several billions for AI ecosystem. Meanwhile, developers across India’s top seven cities are steadily launching larger apartments.

India’s AI Options Beyond Optics: Real But Untapped

The India AI Impact Summit 2026 was meant to be a victory lap for a burgeoning tech superpower. Instead, it has sparked a fierce debate on whether the nation is building a true intelligence revolution or merely settling into a role as a digital storage colony. As software stocks recover from a panic-induced slump and global tensions redefine the arms trade, the gap between optical success and strategic depth has never been wider.

Data Dreams and Coal Realities

A central pillar of the current push is an invitation for the world to store its data in India. But a critical question remains: does housing foreign data centers equate to AI capability?

Processing AI requires immense power—measured in gigawatts, not server racks. Without a breakthrough in battery storage or a shift away from Chinese-dependent mineral chains, India faces a grim choice: power these data centres with coal, worsening national air quality, or risk strategic dependency.

Storage Illusion

Hosting foreign data provides little strategic edge while demanding massive power. Relying on battery electric storage systems (BESSs) invites dependency on China’s mineral monopoly, while thermal backups increase pollution. Instead of relying on foreign lands, India must prioritise capturing its own massive data streams to fuel indigenous models. Real sovereignty lies in building local AI for national security, not in housing proprietary foreign data protected by inviolable privacy locks.

The Funding Frontier

With R&D spending stuck at a mere 0.65% of GDP, India’s path to a trillion-parameter foundation model remains blocked. The talent exists, but the chip constraint is real. A radical proposal is now emerging: what if ordinary Indian savers could fund the next national champions? By opening venture capital—traditionally the playground of the ultra-rich—to SIP investors and pension funds, India could mobilise the domestic capital needed to build its own silicon destiny.

The tools for global leadership are within reach, but they require moving beyond the optics of summits.

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$225 billion

That’s over how much global tech leaders and domestic conglomerates have committed to build a full-stack AI ecosystem.

Overview: Reliance Industries on Thursday committed to invest Rs 10 lakh crore ($110 billion) over seven years to establish Jio Intelligence. Vowing that India will not "rent intelligence," chairman Mukesh Ambani unveiled plans for gigawatt-scale, AI-ready data centers in Jamnagar. Adani Enterprises on Tuesday announced a $100 billion commitment to renewable-powered data hubs by 2035.

Alphabet CEO Sundar Pichai countered with a $15 billion infrastructure offensive, centered on a massive computing campus in Visakhapatnam. The America-India Connect initiative will link Vizag to the US and Africa via four new subsea fiber-optic systems, aiming to prevent a global AI divide.

The Shift: While OpenAI’s Sam Altman predicted that by 2028, most intellectual capacity would reside within data centers, Anthropic’s Dario Amodei and Vianai founder Sikka warned of a "diffusion gap." Despite AI’s ability to condense nine months of coding into 14 days, organisational friction and safety concerns remain.

Pivot: Bill Gates abruptly withdrew from his scheduled keynote, following intensified scrutiny over his ties to Jeffrey Epstein and newly released US Justice Department emails. This high-profile exit added to the setbacks for an event already struggling with organisational lapses, a robotic dog controversy, and logistical chaos.

Critical Moment: Infosys Chairman Nandan Nilekani delivered a sobering assessment during a fireside chat with Anthropic CEO Dario Amodei. Nilekani warned that while the "race to the bottom"—driven by deepfakes and rising energy costs—is moving fast, the "race to the top" requires urgent acceleration.

India’s Upsizing Trend

Developers across India’s top seven cities are steadily launching larger apartments, with 3–4 BHK units and study-room formats becoming mainstream, according to an Anarock report. Average apartment sizes across the top seven cities rose to 1,676 sq ft in 2025 from 1,420 sq ft in 2023 — a 45% jump since 2019.

By The Numbers: Hyderabad retained the top spot with 2,600 sq ft homes, while the National Capital Region recorded the fastest growth, expanding 30% to 2,466 sq ft, driven by luxury launches. In contrast, the Mumbai Metropolitan Region remained the most space-constrained at 904 sq ft. Growth was modest in Kolkata and Pune, signalling uneven demand across markets.

Expert's Say: Anuj Puri, chairman of Anarock, said demand for spacious homes remains resilient despite rising prices, underscoring luxury housing’s dominance.

India Magnet Mission

The Union government will start domestic production of rare-earth permanent magnets by the end of 2026, Mining Minister G Kishan Reddy said at a conference organised by FICCI and the Ministry of Mines. 

How We Got Here: The move follows supply disruptions after China tightened export controls on rare-earth materials last year, slowing shipments and forcing parts of India’s auto and electronics supply chain to pause operations. India imports most of its high-performance magnets from China, which dominates global processing.

Turning Point: The Cabinet approved a Rs 7,280 crore scheme in November 2025 to build an integrated domestic supply chain, from processing rare-earth oxides to manufacturing finished magnets. India holds the world’s third-largest rare-earth reserves but lacks large-scale magnet production. The government will partner with private firms as demand rises with electric vehicles and clean energy expansion.

Caracas In The Mix

State-run Bharat Petroleum Corporation Ltd (BPCL) and HPCL Mittal Energy have purchased Venezuelan crude oil, sources told Reuters. BPCL bought Venezuelan oil for the first time, while HMEL made its first purchase in two years, with each refiner acquiring around one million barrels of heavy Merey crude through global trader Vitol. The shipments will be co-loaded on a very large crude carrier to reduce shipping costs.

Implications: The purchases boost India’s Venezuelan crude imports and mark a strategic diversification of India’s supply mix, as refiners reduce reliance on Russian oil after geopolitical shifts in global markets.

Forecast: Indian refiners are expected to continue widening their sourcing options amid changing global crude flows.

Fears of Imminent Attack by the US on Iran Bring Down Markets

On Episode 803 of The Core Report, financial journalist Govindraj Ethiraj talks to Priyanka Kishore, Director and Principal Economist at Asia Decoded as well as Rahul Jain, Director/VP Research at Dolat Capital.

  • Fears of an imminent attack by the US on Iran bring down markets

  • India brings on stage the world’s biggest technology companies and disruptors with rivalry on full display

  • Guess which city in India has the largest homes?

  • Why the recently signed FTAs by India are just the beginning of much hard work ahead

  • And more countries are gearing to ban social media for teens, this could affect business models too

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