India Goes After AI Investment

India’s warm welcome to AI firms sets it apart from other large economies with slightly more restrictive regulatory approaches.

Photo of India's flag
Photo by Graphic Gears via Unsplash

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While some countries break out the AI cudgel, others are rolling out the red carpet. 

The Financial Times reported on Monday that India is providing billions of dollars’ worth of incentives to woo AI firms into setting up shop — or at least data centers — on the subcontinent. India is a large economy and a rising star in the tech world, and its warm welcome to AI firms sets it apart from other large economies with slightly more restrictive regulatory approaches.

Hyderabad Hyperscalers

Like India, Argentina is also selling itself as a haven of deregulation in a world where restricting tech firms has been in vogue. But India has been in the game of winning over tech companies from their old outsourcing bulwark China for a while; it has already signed “hyperscalers” — i.e., large cloud computing infrastructure companies like Microsoft and Amazon — for huge amounts of forward computing capacity. According to data provided to the FT by cloud consulting firm Structure Research, Microsoft’s investment in the Indian state Telangana shows it wants to add IT capacity equivalent to 500,000 European households. In March, the Indian government announced a 103 billion rupee ($1.25 billion) investment pot for AI infrastructure and startups.

While no country wants to be left out of the AI gold rush, those who are actively courting firms set themselves apart:

  • On Friday, Meta announced that it had stopped training its Large Language Models (LLMs) on data from EU Facebook and Instagram accounts, in compliance with an order from Ireland’s Data Protection Commission (DPC), Meta’s lead regulator in the bloc.
  • Meta’s statement on the subject was fairly salty: It said it won’t be able to launch its “Meta AI” assistant product in Europe for now, adding that AI services it may want to offer EU citizens will be a “second-rate experience.”

Warning, This Product May Cause Endless Procrastination: Before generative AI took the world by storm, it was the positively ancient world of social media that captured the attention of regulators and lawmakers — and they’re not done with it. In an op-ed for The New York Times, published Monday, U.S. Surgeon General Vivek Murthy argued in favor of attaching warning labels to social media platforms, saying their usage among young people is a significant factor driving a youth mental health crisis.