India has emerged as a top global player in artificial intelligence (AI) readiness, ranking third after the United States and China, while also being one of the least concentrated equity markets in the world, according to a recent report by J.P. Morgan. The report, titled Semiquincententacles: The U.S. Grip on Global Markets at 250, highlights India's unique standing in global capital markets and the evolving AI and semiconductor landscape.
Equity Market Concentration: India Among the Lowest
The report compares stock market concentration across countries, noting that while the share of the ten largest companies in the S&P 500 has risen sharply in recent years, India remains among the least concentrated markets globally. As recently as 2015, the ten largest U.S. stocks represented just 17% of the S&P 500's market capitalization; now that figure has risen to 40%. However, the report adds that "40% concentration still ranks among the three lowest equity concentration figures in the world; only Japan and India have less."
AI Readiness: US Leads, India Third
The report underscores the growing dominance of the United States in AI and advanced computing, particularly in semiconductors and AI infrastructure. According to the report, "the U.S. is the most vibrant and prepared country for AI, with China close behind on some measures." In Stanford University's Global AI Vibrancy Index, cited by the report, the United States ranked first, China second, and India third. The index measures countries across parameters including research and development, infrastructure, education, policy, governance, and economic readiness.
US Productivity Gains and AI Innovation
The report further observes that the United States continues to maintain a commanding position in AI-related productivity gains and technological innovation. "Whether the issue is labor productivity or total factor productivity, the U.S. leads the G10," it says, adding that productivity growth in the information and data-processing sectors accelerated significantly following the launch of generative AI tools. On semiconductors and AI hardware, the report highlights the central role of U.S. companies in the global accelerator market, noting that Nvidia continues to dominate AI accelerator revenues, although competition from custom chips developed by hyperscalers such as Google, Amazon, Microsoft, and Meta is increasing.
China's Rapid AI Advancement and Cost-Efficient Models
At the same time, the report points to the rapid advancement of Chinese AI models and growing competition from China within the AI ecosystem. Referring to cost-efficient AI models, the report says that the "efficient frontier" in intelligence-per-dollar is "dominated by China (DeepSeek, MiniMax, Xiaomi, Alibaba)," with only a limited presence from U.S. models. It further notes that "Chinese models appear as triangles, U.S. models as circles" in comparative assessments of AI model performance and operating costs. The report cites growing adoption of Chinese AI models by businesses seeking lower costs, noting that "OpenRouter shows a surge in API calls to Chinese models" and that, by April 2026, leading Chinese open-weight models "scored within a few dozen Elo points of closed frontier models and cost 10x-50x less per token."
Outlook for India and Global AI Landscape
Despite China's progress, J.P. Morgan maintains that the United States remains the global leader in AI innovation, infrastructure, and investment, while warning that policy restrictions and supply-chain vulnerabilities could affect its future lead. For India, the report's findings suggest a strengthening position in AI readiness and global market diversification. However, the country remains far behind both the U.S. and China in overall AI capabilities and semiconductor ecosystem development.
