When Systems Hit Their Limits

Good morning. In further escalation of the war, Iran shot down a US F-15E fighter jet, and another plane crashed in the Gulf, reports said on Saturday. While Iran shot down the two-seater US F-15E, another A-10 Warthog fighter aircraft crashed in Kuwait, according to Reuters. The report said that Iranian forces were hunting for a missing US pilot who escaped from one of the planes. 

Iran said its position on the war was being misrepresented by the US media.

"What we care about are the terms ⁠of a conclusive and lasting END to the illegal war that is imposed on us," Foreign Minister Abbas Araqchi said on X.

Back home, the Centre dismissed reports of supply disruptions and said that India's energy supplies were safe. This is something that the government has maintained since the beginning of the war. 

"Indian refiners have secured their crude oil requirements, including from Iran; and there is no payment hurdle for Iranian crude imports, contrary to the rumours being circulated," the Ministry of Petroleum and Natural Gas said in a statement. 

India's LNG import terminals were, however, running at their lowest capacity because of the West Asia crisis. Business Standard reported that in Petronet LNG’s Dahej terminal, which has a 17.5 MT per year capacity, utilisation decreased 56% in March from 94% in February. About three quarters of Dahej’s supplies came from Qatar last year, the report said.  

India’s foreign minister S Jaishankar said on Saturday that India had been resilient in managing global shocks.

“No one can dispute that multiple global shocks have recently tested our resilience and India has come through that solidly. We have managed both domestic and external challenges fairly successfully," Business Standard quoted him as saying at a convocation ceremony at the Indian Institute of Management Raipur.

On this week’s weekend playlist:

Big systems don’t break all at once. They erode at the edges—quietly, then all at once.

This week, three conversations point to that slow unravelling. Geopolitics is no longer a backdrop to markets; it is the market. Artificial intelligence is no longer constrained by imagination, but by compute, cost, and control. And industries like media are being reshaped not by disruption alone, but by the hard economics of scale and attention.

What ties them together is a shift from abundance to constraint—from a world optimised for growth to one forced to make choices.

This edition follows those fault lines.

HOW INDIA’S ECONOMY WORKS

When Power Replaces Rules: The Age of Endless Conflict

The post–Cold War promise was simple: trade would deepen interdependence, institutions would manage conflict, and rational negotiation would keep escalation in check. That architecture is now visibly fraying.

In the latest episode of How India’s Economy Works, Safi Rizvi makes a blunt case—what we’re witnessing is not just another geopolitical flare-up involving Iran, the United States and its allies. It’s a structural shift. Multilateralism isn’t collapsing overnight; it’s being quietly bypassed. Power, not process, is back at the centre of decision-making.

And that changes how conflicts behave.

Without trusted negotiation channels, wars don’t resolve—they linger. They become fragmented, harder to predict, and more economically corrosive. The Ukraine war was an early signal. West Asia is reinforcing the pattern. Military strategy itself is being stress-tested: intelligence gaps are widening, AI-led targeting is proving imperfect, and the line between “deterrence” and “attrition” is blurring. Meanwhile, defence spending isn’t just rising—it’s entrenching a more permanent military-industrial cycle.

But the sharper shift is economic.

Energy markets have quietly tilted east. Asia—India, China, Japan, South Korea—is now the primary demand centre. That makes vulnerabilities like the Strait of Hormuz exponentially more consequential. A disruption here is no longer a regional shock; it’s a systemic one, with immediate spillovers into inflation, currency stability, and trade balances across emerging economies.

For India, this is a tightrope. It must navigate energy dependence, maintain strategic neutrality, and hedge against prolonged volatility—all while sustaining growth.

The larger takeaway is uncomfortable: the global system is no longer optimised for stability. It is being rewired for resilience in a more adversarial world. Markets will adjust, as they always do—but the adjustment may be slower, costlier, and far less predictable than before.

In other words, this isn’t just about oil prices or one conflict. It’s about learning to operate in a world where uncertainty is the baseline.

SPECIAL EDITION

The Real AI Bottleneck: Power, Compute, and Control

The question is no longer who is building AI—it’s who can afford to sustain it.

At a recent offline panel hosted by The Core and moderated by Govindraj Ethiraj, a hard constraint came into focus: AI may not scale without limits. Not for lack of innovation, but because of growing pressures on compute, energy, and cost—strains that even players like OpenAI are beginning to acknowledge.

This reframes the AI race. It’s no longer just about innovation; it’s about control over infrastructure. Compute is concentrating in the hands of a few—Nvidia, Microsoft, Google, Meta—turning AI into a question of access as much as capability.

The implications are structural. AI systems risk being shaped by linguistic, cultural, and economic biases—English-first, capital-heavy, and globally uneven. At the same time, enterprises are realising that deploying AI isn’t a technology problem alone; it’s a relevance problem. Data quality, context, and human judgment are emerging as the real differentiators.

Across the discussion, one idea held: AI will amplify human capability, but not replace human responsibility.

Because in the end, governance—not just innovation—will decide who truly controls AI.

ACCENTURE

AI Moves From Experiment to Enterprise

India’s AI moment is no longer theoretical—it’s operational.

As Ajay Vij of Accenture points out, the conversation has decisively shifted from experimentation to execution. Enterprises aren’t chasing novelty anymore; they’re demanding outcomes—measurable ROI, domain depth, and systems that actually scale.

This is a turning point for India’s IT services industry. The traditional model—cost arbitrage and incremental efficiency—won’t hold in an AI-first world. The real opportunity lies higher up the stack: translating AI from isolated use cases into enterprise-wide transformation, where invention meets tangible value creation.

That shift isn’t just technological; it’s organisational. Leadership mindset, workforce readiness, and continuous learning are now strategic variables, not HR checkboxes. And despite the automation narrative, the emphasis remains clear—AI must be human-led, not human-replacing.

India has the talent, scale, and ecosystem to lead. But leadership, as always, will depend on execution.

THE CORE QUIZ

MEDIA ROOM

India’s ₹2.7T Media Shift

India’s media and entertainment industry has crossed ₹2.7 trillion—and the real story is the shift underneath. Digital has surged past ₹1 lakh crore, reshaping the balance with traditional TV as connected TV and short-form content accelerate.

Growth is being fuelled by advertising, government spending, and rising SME participation, while consumer behaviour is fragmenting faster than ever. At the same time, live experiences—from cinemas to large events—are making a strong comeback.

Consumer behavior is evolving just as quickly. Audiences are fragmenting, attention spans are shrinking, and yet demand for immersive, high-quality content is rising. This duality is pushing companies to rethink both content and monetisation—whether through innovative ad formats, hybrid subscription models, or platform-specific storytelling.

As monetisation models evolve and consolidation picks up, one thing remains unchanged in an AI-driven, crowded market: content quality is still king.

MESSAGE FROM OUR SPONSOR

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