The AI Race Pushes India Toward the West

Officially, India may resist aligning itself with the U.S. But like most middle powers, it has little room to maneuver. The emergence of India, the world’s most populous nation, as a de facto American tech ally affects the balance of power in Asia and beyond. This relationship could widen the gap between American AI companies and their Chinese rivals. It could also boost U.S. competitiveness in other parts of the Global South, a catchall term for underdeveloped nations in Asia, Africa and Latin America.

It won’t be easy for India to accept that its near-term technological future is tied to the United States. President Trump’s unpredictability has amplified longstanding Indian fears about America’s reliability. Many Indian nationalists dream of India’s emerging as a third technological pole to rival the U.S. and China.

This is unrealistic. India’s clearest path to technological modernization requires deepening cooperation with the U.S. and its allies. But to keep this cooperation on track, Washington will need to convince India that it, unlike China, seeks a mutually beneficial partnership, not a form of digital vassalage. For India, catching up isn’t in the cards. Adam Segal, an expert on emerging technologies at the Council on Foreign Relations, points out in a phone interview that AI may soon reach the stage of “recursive self-improvement,” in which the technology upgrades itself.

If this happens, “the gap between the U.S. and China and middle powers will get even larger.” Mr. Segal says that if self-recursiveness happens, which many experts regard as likely, India will need to adapt either American or Chinese AI rather than develop a frontier model of its own to compete with the likes of ChatGPT, Claude or China’s Qwen or DeepSeek. New Delhi has already indicated its preference for the West.

Since February, India has been a member of Pax Silica, a U.S.-led initiative that seeks to secure AI supply chains. (The name suggests an alternative to Pax Sinica, a term for a Chinese-dominated order.) Of Pax Silica’s 24 signatories—25 if you include Taiwan, which is a participant but not a signatory—the vast majority are traditional U.S. allies. Eight belong to the North Atlantic Treaty Organization.

Only two (India and the United Arab Emirates) belong to the 11-member Brics grouping led by China and Russia, of which India is a founding member. Membership in rival groups embodies India’s decadeslong quest to chart an independent path in foreign policy. Over the years, the nomenclature has changed—from nonalignment to strategic autonomy to multialignment—but the substance has remained the same.

India abjures formal alliances, which it sees as constraints on its independence. India is apparently comfortable with being part of U.S.-led groupings such as Pax Silica and the Quad (the U.S., India, Japan and Australia) while also belonging to Brics and the Shanghai Cooperation Organization, a security group led by China and Russia. Indian elites romanticize the idea of India as an independent tech power.

They point to India’s homegrown nuclear-weapons program, which successfully tested its first weapon in 1974, and to a low-budget space program that in 2023 made India the first country to land a craft near the Moon’s south pole.

This confidence has been reinforced by the global success of Indian software services companies and the prominence of Indian-born CEOs leading U.S. tech firms such as Google, Microsoft and IBM. Indian proponents of tech sovereignty point to the country’s strengths.

By some accounts, India accounts for about a fifth of the world’s chip design engineers. Prominent companies such as Nvidia, Qualcomm and AMD have design centers in India. Add to this growing critical mineral-processing capacity, vast AI training data generated by India’s large population, and the potential role of Indian IT companies in diffusing AI to less technologically advanced economies. India also boasts advanced digital infrastructure, including a biometric ID system, digital payment interface and secure storage platform.

But these achievements don’t suggest that India is remotely in the running when it comes to frontier AI models. A paper published this year by the Foundation for American Innovation points out that this is essentially a two-horse race between the U.S. (which is in the lead) and China.

Most foreign investment in India’s tech industries—including about $67 billion committed by Microsoft, Google and Amazon, among other things to build data centers and enhance cloud capacity—comes from American and Western-aligned companies. Geopolitics also pushes New Delhi away from Beijing: China actively claims Indian territory and tries to slow Indian progress by holding up exports of equipment and discouraging Chinese engineers working for Taiwanese firms from passing on know-how to Indians. China is also the chief patron and arms supplier of Pakistan.