As global artificial intelligence (AI) mania sends US tech stocks soaring, a familiar worry is nagging Indian investors: Is India being left behind in the AI revolution? While giants like Nvidia lead a historic rally, the Indian market appears disconnected from this frenzy, with local IT firms having minimal exposure. Some analysts, like Christopher Wood of Jefferies, have even labeled Indian equities a "reverse AI trade," suggesting they might shine if the global AI bubble bursts.
Dot-Com Parallels: Why Being Late Isn't a Loss
However, Deepak Shenoy, the founder and CEO of financial research firm Capitalmind, offers a contrarian and optimistic perspective. He firmly believes that "AI as a theme is not lost for India." In fact, he posits that India's delayed entry into the AI race might evolve into a significant strategic advantage.
Shenoy draws a compelling comparison to the dot-com boom of the late 1990s. Back then, India was not an early player either. While Silicon Valley startups burned through unprecedented capital, India focused on building foundational capabilities quietly. "Even during the dotcom boom, we were so late to that party. But guess what? Today, we have one of the largest e-commerce markets worldwide," Shenoy remarked. He argues that missing the initial hype did not ultimately prevent massive wealth creation in India's digital economy over 25 years.
The "Lakshmi Mittal" Playbook for AI Domination
Shenoy uses a powerful analogy to crystallize his vision for India's role in the AI saga: "We are the Lakshmi Mittals of the AI industry." Just as the steel magnate built a global empire by acquiring distressed assets at rock-bottom prices during industry downturns, India could benefit from an inevitable consolidation in the overheated AI sector.
He predicts that the current AI investment boom, led by US-based "Magnificent Seven" companies, will eventually see a shakeout. When some AI firms falter, their valuable technology, products, and intellectual property won't vanish—they will simply become far more affordable. "We may not be able to put in $200 billion, but if that technology is available to us for $20 billion, we will buy it when nobody else in the world will want it," Shenoy explained. This patient, value-driven approach, he asserts, is smarter than chasing overvalued assets today.
The Long Game: AI as a 2026-2030 Theme
The AI theme has undoubtedly dominated 2024, with Nvidia's market capitalization spectacularly crossing the $5 trillion mark. OECD Secretary General Mathias Cormann has also affirmed that the AI investment surge boosting global growth is set to continue.
While Shenoy expects AI to remain a significant narrative through 2026, he advises investors to think longer-term. "It might take four to five years for this whole thing to evolve," he stated, suggesting that Indian companies will likely capitalize on the theme 3 to 5 years down the line. His message is one of strategic patience: India must wait for the US-led bubble to form and then be ready to pick up the pieces sensibly, transforming apparent tardiness into a calculated advantage.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms. Investors are advised to consult certified experts before making any investment decisions, as market conditions can change rapidly.
