The Race for AI: India’s Response to Global Startup Trends

Introduction

Earlier this year, the tech world was shaken when the Chinese startup DeepSeek launched its low-cost R1 large language model. Leveraging less powerful chips, it competes with the billion-dollar models from U.S. giants, prompting discussions about the state of AI development in India.

The Growing Concern

Despite India’s tech talent gaining accolades worldwide, the country has yet to produce a homegrown AI model comparable to DeepSeek or OpenAI’s ChatGPT. Critics are quick to point out a noticeable gap in cutting-edge innovations, particularly in AI, machine learning, and robotics.

Voices from the Industry

Amidst these discussions, Zepto CEO Aadit Palicha provided a critical perspective on what he believes is hindering India’s progress. In a post on X (formerly Twitter), he highlighted the core issue: the lack of large-scale, profitable internet companies in India.

Lessons from U.S. and Chinese Giants

Palicha noted that U.S. and Chinese tech giants like Amazon, Google, Facebook, Tencent, and Alibaba began as consumer-focused companies before leveraging vast data and capital to evolve into global tech leaders. In India, a similar trajectory is missing.

Innovations by Indian Startups

While acknowledging the challenges, Palicha emphasized that Indian startups, including Zepto, have made meaningful contributions in a short time. Since its launch 3.5 years ago, Zepto has supported approximately 150,000 livelihoods and has garnered over a billion dollars in foreign investment.

Investment in Infrastructure

The company has also invested hundreds of crores into modernizing India’s fragmented backend supply chains, a significant step toward fostering a more efficient economy.

Palicha’s Vision

Although Palicha admits that Zepto has much ground to cover before it can be considered a globally competitive internet company, he remains committed to reinvesting profits back into innovation. This commitment aims to create long-term value for India’s digital economy.

The Need for Resilience

He argues that India’s startup ecosystem, which is still in its adolescence, requires a shift in focus toward building resilient and capital-generating internet companies. Only then can India hope to be a front-runner in the next global tech revolution.

Comparing India and China

Recently, Zoho’s founder Sridhar Vembu shared infographics on X comparing Indian and Chinese startup ecosystems, illuminating significant differences in their priorities and approaches.

Startup Priorities

The infographics suggest that while Indian startups gravitate toward consumer-driven models—such as food delivery and entertainment—Chinese counterparts invest heavily in deep-tech sectors, including AI, EVs, semiconductors, and robotics.

Cultural Perspectives

This contrast highlights a broader narrative: India’s startup culture tends to prioritize convenience and entertainment, while China’s is building a robust foundation focused on advanced technology and infrastructure.

Insights from Piyush Goyal

Commerce and Industry Minister Piyush Goyal echoed these sentiments, urging Indian startups to venture beyond instant delivery and entertainment to explore high-tech domains like semiconductors and robotics.

Focus on Innovation

Speaking at the recent Startup Mahakumbh event, Goyal emphasized the need for prioritizing domestic capital in future-focused innovations, warning against the risks of positioning India merely as a service economy for foreign enterprises.

Call for Evolution

He underscored the importance of evolving, competing, and preparing India for the industries of the future—a significant call to action for startups across the nation.

About Zepto

Founded in 2021 by Aadit Palicha at just 17 years old, Zepto initiated as a daring experiment during the pandemic. With a background in computer science and an initial stint at Stanford University, Palicha dropped out to create something impactful for India.

Zepto’s Growth Journey

Starting with its first warehouse in Mumbai’s Bandra, Zepto has since established a network of dark stores and over 50,000 delivery partners across multiple cities, marking a significant evolution in a short timeframe.

Conclusion

As India navigates its journey within the global tech landscape, the voices of leaders like Aadit Palicha and Piyush Goyal highlight the crucial need for innovation, resilience, and bold investments in foundational technologies. Only with a concerted effort to shift priorities can India hope to lead the next global technology revolution.