Modi's AI Spectacle: Chaos and Deception in New Delhi

The India AI Impact Summit 2026, held at Bharat Mandapam in New Delhi, has been marred by chaos, confusion and deception. The events on the ground have produced unintended media headlines for India's Prime Minister Narendra Modi who wants to be seen as the "vishwaguru" (teacher of the world) in the field of artificial intelligence as well. First, there was massive chaos on the opening day, with long lines and sudden unannounced evacuation of exhibitors and attendees from the show floor for several hours. This, the Indian government said, was done for "VIP" security, a euphemism for Mr. Modi's "photo op" as he walked the venue halls alone for the benefit of the cameras for self-promotion. Mr. Modi then declared that "India is not just a part of the AI revolution, but is leading and shaping it". To support such claims, an Indian University presented a "robodog" bought from China as its "innovation", a blatant lie that was immediately caught by people on the social media, leading to the expulsion of the institution from the show. 

5-Layer AI Stack

Let's examine Mr. Modi's claim to be "leading and shaping" the AI revolution. The artificial intelligence technology is a 5-layer stack, consisting of energy, AI chips, infrastructure, AI models and applications. Only two nations, the United States and China, have their own full 5-layer stacks. It's hard to see India as leading in any one of these layers. 

Currently, the AI space is dominated by China, the US and a handful of hyperscalers like Amazon, Google, Microsoft, etc. Any country wanting to jump on the AI bandwagon has to choose between the American and Chinese giants. Bloomberg put it best as follows:

"This, fundamentally, is a matter of sovereignty: Whether a nation’s AI systems can be independent of foreign authority. That danger was showcased in 2024, when members of Australia’s UniSuper pension fund had access to their accounts cut off due to a Google cloud misconfiguration. In October, Amazon.com Inc.’s cloud services — the world’s largest — also suffered a major shutdown, damaging its reputation". 

Strict security restrictions at the Indian AI summit caused significant limitations on carrying personal items, including laptops and other electronic devices.  In spite of such "strict security", some participants reported their exhibits and personal items stolen at the event. The fact that only cash was accepted for food and other services at the venue for the AI Summit makes a mockery of the Modi government's hype about India's digital public infrastructure (DPI). 

India's Galgotias University of Uttar Pradesh Showed Chinese Robodog as its Own

There is a significant presence of Americans at the AI Summit in New Delhi. Major "hyperscalers" like Anthropic, Google and OpenAI and Microsoft executives are all attending. The American agenda at the conference was put very succinctly by Sriram Krishnan, Senior White House Policy Advisor on Artificial Intelligence, who said, "...We want to make sure that the world uses the American AI stack...We also want the world to use our AI model...We want all our allies, including India, to leverage our AI infrastructure."

Major US technology firms have announced plans to build large multi-gigawatt AI data centers in India that make enormous demands on energy and water for powering and cooling the energy-hungry beasts. They are facing strong resistance in US cities and towns because of concerns that they will divert precious water and power, increase the rates they have to pay and cause pollution. India appears to be welcoming them for the investment they bring, in spite of significant health and safety concerns. But the Americans will not guarantee "data sovereignty" to the Indian government for Indian consumers' data stored in these data centers. 

President Donald Trump has recently scrapped greenhouse gas emission regulations to enable the use of fossil fuels to power AI data centers in the United States. But the local opposition by cities and towns continues to gather steam. 

Views: 1401

Comment by Riaz Haq on May 18, 2026 at 7:37am

Keji Mao (毛克疾）
@kejimao
The Japan Times writes, "India stands out as one of the biggest losers as the artificial intelligence trade reshapes global investment flows." It is quite surprising that even a major Japanese newspaper speaks out about this loudly. But the truth is Japan may well be in an even worse position when it comes to AI.

https://www.japantimes.co.jp/business/2026/05/17/india-missing-out-...

https://x.com/kejimao/status/2056269461955776653?s=20
-------

India missed out on AI and now its run as market darling may be over

https://www.japantimes.co.jp/business/2026/05/17/india-missing-out-...

In a stark shift, the country’s stock market is on the verge of dropping out of the world’s five biggest for the first time in three years. Without the AI-driven rallies powering Taiwan and South Korea, there’s a growing risk that India falls further behind rather than regaining lost ground.

The rationale goes far beyond Indian equities being relatively expensive or corporate earnings slowing. Global investors, who not long pushed India close to rivaling China in emerging-market portfolios, are now chasing themes the country’s market largely lacks: chip manufacturing, computing infrastructure and AI models. While India has talent, demand and digital scale, few of its corporate champions are directly linked to that buildout. That increasingly leaves the market tied to the domestic consumption story.

“This isn’t a dip you buy,” said Gary Dugan, chief executive of Global CIO Office. “What markets haven’t fully priced yet is that this isn’t an earnings miss story in India, it’s a terminal value story. The assumptions about where these businesses are in 10 years have to change.”

Underscoring the scope of the revaluation, India’s weight in the MSCI emerging markets index has fallen to about 12% from 19% last year. Roughly two-thirds of the reallocation from India over the past 12 to 18 months reflects AI positioning, according to M&G Investments.

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India Misses Out on AI: Stock Market Close to Falling From Top 5 as AI Trade Favors Taiwan, Korea - Bloomberg

https://www.bloomberg.com/news/articles/2026-05-17/india-missed-out...

Takeaways by Bloomberg AI

India's stock market is on the verge of dropping out of the world's five biggest for the first time in three years due to the artificial intelligence trade reshaping global investment flows.
Global investors are chasing themes that India's market largely lacks, including chip manufacturing, computing infrastructure, and AI models, leaving the market tied to the domestic consumption story.
India's weight in the MSCI emerging markets index has fallen to about 12% from 19% last year, with foreign investors abandoning India at an accelerating pace and holding less than domestic institutions for the first time in more than 20 years.
India stands out as one of the biggest losers as the artificial intelligence trade reshapes global investment flows.

In a stark shift, the country’s stock market is on the verge of dropping out of the world’s five biggest for the first time in three years. Without the AI-driven rallies powering Taiwan and South Korea, there’s a growing risk that India falls further behind rather than regaining lost ground.

The rationale goes far beyond Indian equities being relatively expensive or corporate earnings slowing. Global investors, who not long pushed India close to rivaling China in emerging-market portfolios, are now chasing themes the country’s market largely lacks: chip manufacturing, computing infrastructure and AI models. While India has talent, demand and digital scale, few of its corporate champions are directly linked to that buildout. That increasingly leaves the market tied to the domestic consumption story.

Comment by Riaz Haq on Wednesday

 India stocks set for first yearly drop in over a decade as foreign investors leave: Reuters poll | Reuters


An exodus of foreign #investors and limited exposure to an artificial intelligence (#AI) boom batter what was once Asia’s most attractive #market.
Some analysts say India’s valuation premium, once justified by strong economic growth expectations, is becoming harder to defend. The Indian market trades at more than 20 times earnings, above most major European and emerging markets, but offers one of the world’s lowest dividend yields.

That has left Indian equities vulnerable as global investors look for cheaper markets and higher-return opportunities linked to the AI-led global equity rally, particularly in US technology stocks. South Korea’s AI-laden KOSPI index has surged more than 200% in a year.

Meanwhile, India’s heavyweight information technology stocks index has fallen by more than a third since December 2024.

Already down about 8.5% this year, the Nifty 50 was forecast to rise only around 8.7% to 26,000 at end-2026 from Tuesday’s close, a May 15-27 poll of 24 analysts showed. If realised, the annual decline of about 0.5% would be its first yearly loss since 2015.

It was then expected to bounce to 27,000 by mid-2027 and 29,000 by end-2027.

The BSE Sensex was projected to be 84,150 at end-2026 and 87,895 at mid-2027. The median forecasts for both indices were sharply downgraded from a February poll, conducted before the US-Israel war with Iran began.
 
 
”Everyone wants returns at the end of the day, whether it’s foreigners or domestic investors. Nobody wants to just park their money for fun … but the returns are not there, earnings growth is almost negligible to very low.

AI is where the flavour of the town is right now and this is where India, not just we lack it, we are actually on the wrong side,” said Rajat Agarwal, Asia equity strategist at Societe Generale.

Agarwal added domestic buyers who were keeping the market afloat through monthly systematic investment plans (SIPs) were also showing signs of strain.

SIPs, which are regular monthly mutual fund investments by retail shareholders, have grown nearly tenfold over the past decade. Domestic institutional investors (DIIs) now own a record share of Indian equities while foreign ownership is at an all-time low.

”It is thanks to local DIIs and liquidity from retail participants the market has held up,” said Aman Sethia, head of treasury at Groww. ”If this hadn’t been in place, we would have seen the Nifty at around 19,000 or 20,000 over the last year.”

A slim majority of analysts, 13 of 24, said a correction was likely over the coming three months.

They said India’s limited exposure to the global AI trade and its vulnerability to a widening current account deficit due to the Middle East war are discouraging foreign investors from committing capital.

”Our exports are not growing and we know import bills will swell now with high energy prices. Given corporate earnings have not been that strong … we are not that favourably placed,” said Kishan Gupta, director at CD Equisearch.

Gupta added India’s corporate sector had not done enough to build innovation-led cash flows, particularly in AI. ”A culture of innovation – that thing is absent in our country.”
Comment by Riaz Haq 5 hours ago

Keji Mao (毛克疾）
@kejimao
India’s greatest weakness lies in having an overly advanced superstructure that is mismatched with its backward economic base and social realities. Put in simpler terms, India possesses first-world aspirations, values, and institutions, but operates with third-world economic resources, social conditions, and governance capabilities. That's why democracy as it stands now may well be a curse on India.

https://x.com/kejimao/status/2061107743013155046?s=20

--------------
ThePrintIndia
@ThePrintIndia
'For China, India poses an ideological threat. It sees Indian democracy as a long-term ideological problem'-Former Foreign Secretary & ex-Ambassador to China, Vijay Gokhale
@VGokhale59
tells Swasti Rao
@swasrao
& Shekhar Gupta
@ShekharGupta
. Watch the full conversation tonight at 8 PM:

#ThePrintOTC

Partners:
@EdelweissFin
,
@NSEIndia
,
@TheQuorumClub
,
@VAHDAM_India
and Chivas Luxe Collective Perfumes

https://x.com/ThePrintIndia/status/2059597989166121002?s=20

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