India stands at the precipice of a significant opportunity in the global Artificial Intelligence (AI) landscape, according to a leading academic. The key lies in addressing a critical gap left by international technology giants: a lack of deep local customisation.
The Customisation Gap: India's Strategic Advantage
Professor Susan Athey, an expert in the Economics of Technology at Stanford Graduate School of Business, articulated this viewpoint during a workshop on AI, jobs, and growth at the Delhi School of Economics. She pointed out that historically, global technology providers have failed to tailor their offerings sufficiently to meet the specific domestic needs of individual countries.
"On this trip, I became more optimistic about India’s ability to participate," Athey stated in an interaction on December 21, 2025. She emphasised that the immense need for customisation in areas like regional languages, local services, and indigenous data contexts is often unmet by prevailing global AI models. This void, she argues, creates a substantial opening for Indian enterprises and innovators to build solutions that are truly relevant to the local population.
Beyond ChatGPT: Implementation is Key
Professor Athey stressed that AI's true value is not just in consumer-facing tools like chatbots, but in its application across diverse sectors including government, defence, healthcare, and business. This diversity in end-users naturally fosters a need for a diversity of suppliers.
"AI is not useful unless it’s actually solving the problem to the finish line," she explained. To reach that finish line, developers must collaborate closely with implementing partners on the ground. For instance, deploying AI in healthcare requires integration with hospital systems and their proprietary data—a complex task often best handled by local players who understand the ecosystem.
She noted that while global companies are engaged in a "race to the top" for general-purpose AI, they may lack the bandwidth to serve all niche requirements in a vast and varied market like India. This, coupled with significant government-led demand in critical infrastructure and payments, provides a powerful impetus for the growth of domestic AI capabilities. "It’s so existential... there’ll be a need for domestic [solutions]," Athey added.
Balancing Sovereignty, Innovation, and Copyright
The professor also addressed pressing concerns about economic sovereignty for developing nations. She warned of the risks of becoming net importers of AI technology, which could lead to dependency and a lack of leverage. For mission-critical systems in payments, electricity, or infrastructure, some degree of local control is essential to mitigate the risk of services being disrupted or prices being raised arbitrarily.
On the topic of regulation, Athey advocated for a balanced approach. Commenting on India's draft framework for copyright and AI data, which suggests a licensing regime for using copyrighted works, she highlighted the need for equilibrium. "It has to balance the ability of startups to get started, when they don’t have a lot of revenue to be able to use data, with the fact that things like the news industry need to get paid or they won’t produce news," she said. She equated daily journalism with innovation, underscoring that both content creators and AI developers contribute value that must be recognised.
Furthermore, Athey highlighted the importance of open-source AI models, like China's DeepSeek, for competition and sovereignty. She noted that such models allow countries to download, customise, and retain technology indefinitely, preventing vendor lock-in. However, she cautioned that access to the very latest advancements might still depend on the original developers.
In conclusion, Professor Athey's analysis presents a clear roadmap: India's large market, unique local needs, and strategic public-sector demand create fertile ground for homegrown AI innovation. By focusing on customised implementation and building local expertise, India can secure a influential and sovereign position in the global AI ecosystem.
