AI has reached a critical juncture, becoming more intelligent and useful due to its reasoning ability. This advancement has led to a significant increase in computational requirements, with the industry needing much more computing power than previously anticipated. 

The generation of tokens for reasoning is a key factor in this increased demand, according to NVIDIA CEO Jensen Huang, who recently addressed the future of AI and computing infrastructure at the GTC 2025 summit in San Jose earlier this week. 

His keynote highlighted AI’s rapid evolution and the immense computational power required to support its growth. “Every single data centre in the future will be power-limited. We are now a power-limited industry,” he said.

With AI models growing exponentially in complexity and scale, the race is on to build data centres, or what Huang calls “AI factories”, that are not only massively powerful but also energy-efficient.

The Rise of the AI Factory

Huang introduced the concept of AI factories as the new standard for data centre infrastructure. These centres, which are no longer simply repositories of computation or storage, have a singular focus—to generate the tokens that power AI. 

He described them as “factories because it has one job, and that is to generate these tokens that are then reconstituted into music, words, videos, research, chemicals, or proteins”.

AI factories, according to Huang, are becoming the foundation for future industries. “In the past, we wrote the software, and we ran it on computers. In the future, the computer is going to generate the tokens for the software.”

Huang predicts a shift from traditional computing to machine learning-based systems. This transition, combined with AI’s growing demand for infrastructure, is expected to drive “data centre buildouts to a trillion-dollar mark very soon”, he believes.

Power Problem is Also a Revenue Problem

As data centres expand, they will face significant power limitations. This underscores the need for more efficient technologies, including advanced cooling systems and chip designs, to manage energy consumption effectively.

Huang noted that the computational requirements for modern AI, especially reasoning and agentic AI, are “easily a hundred times more than we thought we needed this time last year”. 

This explosion in demand places enormous strain on data centres’ energy consumption. His keynote made it clear that moving forward, energy efficiency isn’t just a sustainability concern; it will be directly tied to profitability.

“Your revenues are power limited. You could figure out what your revenues will be based on the power you have to work with,” he said. 

This shift will influence everything from how AI models are trained and deployed to how entire industries operate. In this regard, power is the ultimate constraint in AI-dominated computation. This limitation is reshaping both the design and operation of data centres around the world.

“The more you buy, the more you make,” Huang quipped, encouraging businesses to view their investments in NVIDIA’s accelerated computing platforms as the key to unlocking the full potential of AI-driven value creation.

Scaling Up Before Scaling Out

Huang explained NVIDIA’s approach to managing this power limitation, which would be a fundamental rethinking of scale. 

“Before you scale out, you have to scale up,” he stated. NVIDIA’s new Blackwell platform demonstrates this principle with its extreme scale-up architecture, featuring “the most extreme scale-up the world has ever done”. 

A single rack delivers an astonishing one-exaflop performance within a fully liquid-cooled, high-density design.

By scaling up, data centres can dramatically reduce inefficiencies that occur when spreading workloads across less integrated systems. 

Huang explained that if data centres had scaled out instead of scaling up, the cost would have been way too much power and energy. He pointed out that, as a result, deep learning would have never happened.

Blackwell, a Path to 25x Energy Efficiency

With the launch of NVIDIA’s Blackwell architecture, Huang highlighted a leap in performance and efficiency. According to him, the goal is to deliver the most energy-efficient compute architecture you can possibly get.

Huang believes NVIDIA has cracked the code for future-ready AI infrastructure by combining innovations in hardware, such as the Grace Blackwell system and NVLink 72 architecture, with softwares like NVIDIA Dynamo, which he described as “the operating system of an AI factory”.

Explaining the broader significance, he said, “This is ultimate Moore’s Law. There’s only so much energy we can get into a data centre, so within ISO power, Blackwell is 25 times [better].”

AI Factories at Gigawatt Scale

NVIDIA’s ambitions don’t stop with Blackwell. Huang outlined a roadmap extending years into the future, with each generation bringing new leaps in scale and efficiency. 

Upcoming architectures like Vera Rubin and Rubin Ultra promise “900 times scale-up flops” and AI factories at “gigawatt” scales.

As these AI factories become the standard for data centre design, they will rely heavily on advancements in silicon photonics, liquid cooling, and modular architectures. 

Huang likened the current AI revolution to the dawn of the industrial era, naming NVIDIA’s AI factory operating system Dynamo in homage to the first instrument that powered the last industrial revolution. 

“Dynamo was the first instrument that started the last industrial revolution—the industrial revolution of energy. Water comes in, electricity comes out. [It’s] pretty fantastic,” he said. “Now we’re building AI factories, and this is where it all begins.”

The constant availability of AI tools, ready to answer questions round the clock, has truly made life easier. In fact, with the advent of models like ChatGPT, Perplexity, Claude and DeepSeek, AI is already at the cusp of becoming an integral part of the modern human lifestyle.

These models already have a profound impact, often in ways users may not fully realise. Beyond their day-to-day utility, each prompt processed by AI consumes energy, water and resources that are vital for survival.

Mike Schroepfer, founder of Gigascale Capital and former CTO of Meta, argued that energy is the critical bottleneck hindering the widespread adoption and advancement of AI. 

In a recent podcast interview, Schroepfer highlighted the urgent need to scale energy production to democratise access to AI globally and explored the intricate relationship between AI and climate change.

He proposed using nuclear fusion energy as a solution. “If you wanted to multiply the power grid in the United States by five times and power all of it with fusion, one supertanker could fuel the entire US for a year.”

5x More Power Needed Even Without AI

Schroepfer, who spent nine years leading technical teams at Facebook, now invests in companies using technology to combat climate change. He emphasised that the surge in AI development and deployment places demands on energy infrastructure. 

He pointed out that even without AI, the United States needs about five times the existing power grid by 2050 to reach all its goals.

Considering the power consumption of individual AI agents and then extrapolating that across billions of users. The numbers quickly become concerning, underscoring the scale of the energy challenge that lies ahead.

Similarly, in terms of water usage, a 2023 study found that ChatGPT consumed 0.5 litres of water during each lengthy conversation with a user. When applied to millions of daily users across all AI systems and LLMs, the total water consumption becomes significant.

Another 2027 projection showed that the world’s demand for AI would lead to large amounts of water withdrawal—freshwater taken from the ground or surface water sources, either temporarily or permanently.

This demand, however, presents a unique opportunity to accelerate the adoption of innovative and sustainable energy solutions.

80% of New Energy in the US is Solar

Solar energy is already making significant contributions in various parts of the world, including the US and India. 

India’s solar energy sector is motivated by PM Surya Ghar: Muft Bijli Yojana, the world’s largest rooftop solar initiative, which aims to bring solar power to one crore households by March 2027. 

As installations rapidly increase, with over 10 lakh installations expected by the end of this month, the numbers are expected to double by October this year, reach 40 lakhs by March 2026, and ultimately achieve the target of one crore.

According to Schroepfe, solar energy has been widely adopted in the US, which most people don’t know about. “80% of the new energy on the grid in the US in 2024 is solar, utility-grade solar.”

Regardless, it still has its limitations. Schroepfe said solar works 25% of the time, and it doesn’t work at night or in cloudy conditions, which causes a “time-balance mismatch”. This makes it necessary to explore alternative solutions for continuous power supply. 

While Schroepfe expresses that solar power’s cost-effectiveness makes it an attractive option for expanding energy capacity in the US, it still remains an expensive mode of energy generation in countries like India.

Another technique to investigate is nuclear fusion—the same reaction that happens at the centre of the Sun. Globally, government labs and companies are racing to generate power from fusion.

As per reports, even China has joined the nuclear fusion race, with an estimated budget of $1.5 billion.

Other interesting projects also include offshore compute platforms that harness wave energy while simultaneously providing cooling for data centres.

Moreover, in an interview with AIM, Ann Dunkin, former chief information officer at the US energy department, shared insights into how India can balance AI growth with sustainable energy solutions using renewable energy.

She spoke about the ‘all-of-the-above energy policy’ that revolves around wind, geothermal, solar, clean hydrogen, and nuclear power.

Hyperscalers Move to Nuclear

“Most of the hyperscalers have announced purchase agreements for power for either existing or new nuclear power plants,” Schroepfer said.

He believes that market forces are the most effective driver for scaling and deploying these technologies. He notes that the AI sector’s demand for reliable and affordable energy creates strong incentives for energy companies to innovate and expand their capabilities.

Hyperscalers, who recognise that energy is now as important as data, computation, and algorithms, are already entering into power purchase agreements with both existing and next-generation power plants.

Just as the declining cost of computing power enabled the rise of the internet and mobile technologies, a similar revolution in energy could unlock a wave of innovation across various sectors. 

AI Could Help

According to the World Economic Forum, AI-driven energy efficiency measures and smart grid technologies could generate up to $1.3 trillion in economic value by 2030. 

Furthermore, AI has the potential to reduce global greenhouse gas (GHG) emissions by 5-10%, which is equivalent to the annual emissions of the entire European Union.

AI could help manage grid challenges by simulating scenarios and finding the best ways to balance renewable energy fluctuations.

In an earlier interview with AIM, Shantanu Som, Asia executive engineering leader at GE Vernova, explained how cutting-edge tools could transform the way we keep power systems running reliably and efficiently.

This included predictive maintenance, solving with parity, generative AI, diagnostics, and troubleshooting. 

Last year, it was proposed that AI could help solve the problem faced by the biggest magnetic fusion facility in the US just by using deep reinforcement learning, according to research published in February 2024.

As the world chases a development in achieving artificial general intelligence (AGI), Schroepfer believes while AI can be a tool for solving climate change, relying solely on AGI being an answer to anything is not sufficient.

The ‘Make in India’ initiative, launched in 2014, aimed to transform India into a global manufacturing hub by promoting domestic production and reducing reliance on imports. 

This initiative got a major fillip with Apple announcing that the manufacturing of AirPods for export at Foxconn’s Hyderabad plant will start in April, according to PTI. This move signifies a major shift in Apple’s supply chain strategy as it diversifies its production locations beyond China. 

The decision also underscores Apple’s growing importance in the Indian market, both as a manufacturing hub and a consumer base. This will potentially create new jobs and economic opportunities in the region. 

‘Make in India’ aims to brand the country as a global competitor not only in sectors like automotive, textile, defence, and biotechnology but also in niche sectors like semiconductor manufacturing and the space industry. 

Growing Imports from China

However, there’s a paradox. While the initiative aims to boost domestic manufacturing, rising imports and strategic partnerships with various countries suggest a reliance on foreign technology and investment. Recent trends suggest that despite these efforts, India’s import dependency, particularly from China, continues to grow.

As of February, India’s imports from China had likely surpassed last year’s record of $101.73 billion. According to data from the commerce ministry, the imports reached $84 billion in the nine months to December last. 

The trade deficit more than doubled over the past decade, rising from $44.86 billion in 2015 to $101.28 billion in 2022, according to the Indian Embassy in China. This surge is driven by the import of critical components, such as electronic parts, pharmaceutical ingredients, and machinery, essential for India’s manufacturing sector. 

In a recent report by Hindustan Times, a senior commerce ministry official justified the import growth, noting that most Chinese goods are raw materials or intermediary inputs. While officials argue that these imports support the ‘Make in India’ program, the widening trade deficit with China raises concerns about its effectiveness.

Regardless of the Chinese imports, India has made significant progress under this initiative. For instance, the production of electronics has grown from around $30 billion in FY 2014-15 to $109 billion in FY 2023-24 with a compound annual growth rate (CAGR) of more than 17%, as per the data given as a response by the Indian ministry of electronics and IT in Lok Sabha in December 2024. 

Additionally, India’s electronic goods exports increased by 78.97 % from $2.29 billion in January 2024 to $4.11 billion in January 2025.

Another 2024 report from the commerce ministry indicates that India is now the second-largest mobile manufacturer in the world and has significantly reduced its reliance on smartphone imports, now manufacturing 99% domestically.

In a conversation with AIM, GV Joshi, an economist and former member of the Karnataka State Planning Board, mentioned that some level of imports is inevitable. 

“The spirit of Make in India means [we should be] trying to produce as many articles as possible with the internal resources, without depending upon others for major, even elementary things,” he said.

He believes ‘Aatmanirbhar Bharat’ needs to transcend a mere government initiative and become a deeply ingrained cultural philosophy. He points to the historically self-reliant districts in Karnataka as examples of the mindset required for true industrial independence.

Strategic Global Partnerships vs Domestic Production

In addition to the reliance on imports, India is also engaging in significant strategic partnerships. 

In an interview with AIM, Manjunath Jyothinagara, MD at KASFAB Technologies, said that India’s push for aatmanirbharta (self-reliance) in semiconductor manufacturing has sparked considerable debate around ‘Make in India’.

When asked about the reality of manufacturing India’s first completely indigenous chip in Gujarat, he offered a practical perspective. Acknowledging that “the equipment is all coming from outside India,” he emphasised that the current efforts represent a crucial first step. 

“It is made on Indian soil, using Indian talent and using some of the services coming from India. And that’s the first time.” He cautioned against unrealistic expectations, stating, “You cannot expect an ideal situation like we’d build tools and raw materials for that. Everything from India is not going to happen. I don’t think any country in the world functions like that.” 

Instead, he advocates for an approach, defining ‘Make in India’ as “doing it here with a significant value add”.

Along similar lines, Jayashankar Narayanankutty, group director for sales at Cadence Design Systems, gave AIM his insights on India’s journey towards self-sufficiency in electronics manufacturing. 

He highlighted the importance of the ‘Make in India’ initiative, emphasising that it is a gradual process. “Make in India is a journey where the value added to a product that is used in India grows over time. So, to expect that you go from a low percentage to 100% overnight is unreasonable,” he explained.

This perspective underscores the challenges of relying on imports, particularly for semiconductors, where India’s imports are substantial and comparable to oil imports. 

Narayanankutty pointed out that while importing raw materials is necessary, the goal is to increase value addition within India over time. “This is why even in the government’s purchases today, multinational companies have to prove that a lot of what is happening is happening in India.” 

Meanwhile, acknowledging the potential benefits of strategic global partnerships, Joshi cautioned that India must prioritise building a strong domestic foundation for its ‘Make in India’ initiative. He emphasised that the initiative is an ongoing journey that requires a gradual approach. 

Joshi believes India needs to focus on strengthening domestic supply chains, fostering local innovation, and creating a supportive ecosystem for local manufacturing before fully embracing global collaborations.

Enhancing India’s Semicon Mission

When discussing the establishment of Kaynes SemiCon (a subsidiary of Kaynes Technology India Limited) OSAT project in Gujarat, Raghu Panicker, CEO at Kaynes SemiCon, highlighted the importance of aligning with the ‘Make in India’ initiative. 

Panicker told AIM their technology partners are crucial in this endeavour, stating, “We intend to work with all the technology partners that will take care of the Make in India initiative.” He mentioned this while hinting at the upcoming partnerships with Japanese tech companies.

These partners are expected to contribute by providing a combination of technical support, raw materials, equipment, and other necessary resources. By leveraging partnerships with technology providers, they aim to ensure that the products manufactured in India meet the ‘Make in India’ criteria, which involves significant value addition within the country. 

This strategy aligns with broader government initiatives, such as the India Semiconductor Mission (ISM), which offers incentives for domestic semiconductor production and design to reduce the reliance on imports and foster a robust semiconductor ecosystem in India.

Meanwhile, Narayanankutty expressed that the mindset of companies like Cadence needs to shift from a service-oriented approach to a product-oriented one. While considering that the change will be “difficult and time-consuming” for India, he stresses the need for this difference in mindset. 

This was also iterated last year by India’s IT and electronics minister, Ashwini Vaishnaw. “India will become a product nation, and many products will come from deep tech sectors which will affect every citizen’s life,” he said.

As the April 2 deadline for US President Trump’s proposed 25% tariffs on semiconductor imports approaches, India prepares for potential ripple effects. 

While the country does not directly export semiconductors to the US, its electronics manufacturing sector heavily relies on the import of semiconductor-grade materials and manufacturing equipment. This could result in higher costs for domestic manufacturing, forcing companies such as Apple to deal with increased expenses, which may strain their sales in India. 

However, experts caution that India should build a strong local supply chain to reduce production costs. 

“The concern is not just about making chips, but making chips that meet global efficiency and cost requirements. Otherwise, Indian manufacturers will still prefer imports,” said Hitesh Garg, VP and India country manager at NXP, at the Invest Karnataka 2025 event last month. 

As India navigates this high-stakes journey, the balance between investment, market demand, and ecosystem growth will determine the success of its semiconductor dreams. IT minister Ashwini Vaishnaw recently said the country is poised to have its first Made-in-India chip by 2025, aiming to establish itself as a product nation and enhance its semiconductor ecosystem. 

Santhosh Kumar, president and managing director at Texas Instruments India, argued that rather than striving for complete self-sufficiency, India should integrate into the global semiconductor supply chain by leveraging its strengths in design and software.  

“You can never be a self-reliant country doing everything in semiconductors,” Kumar said. “I don’t see it happening at least in the next 10 years.”

Considering that the semiconductor manufacturing process crosses multiple international borders before the final product is ready in India, he urged the country to carve a niche in the segment. 

Semiconductor fabrication is an expensive and long-term investment. Unlike software, where businesses can scale quickly, chip manufacturing requires billions of dollars in upfront investment, and profitability takes years.  

“The best thing that has happened is the government stepping in with $10 billion in investment. But we need to ensure the technology we invest in today won’t become obsolete in five to 10 years,” Jitendra Chaddah, MD and country head at GlobalFoundries India, said.

The global semiconductor industry is projected to grow from $550 billion today to $2 trillion within a decade. However, there is concern that an oversupply of fabs worldwide could lead to lower prices, making it harder for new entrants like India to remain profitable.  

India’s domestic electronics market is expected to reach $3 trillion by 2047, making it one of the world’s largest consumers of semiconductors and aligning with India’s Viksit Bharat 2047 initiative. 

However, it is uncertain whether India’s fabs will be able to meet global standards at competitive costs. 

Workforce and Skill Development Gap

Despite India’s strong presence in semiconductor design, there is a shortage of talent with hands-on experience in fabrication. The education system has been criticised for being too theoretical and lacking the practical training required to run fabs.  

In an interview with AIM, Jayashankar Narayanankutty, group director for sales at Cadence Design Systems, expressed the need for more industry focused skill-based training. 

The company conducts upskilling programs like the Talent Pipeline Program. He added that since there’s not much history in jobs like semiconductor designing, certain skills are still lacking. 

Regardless, he says the base talent is good, however, more awareness of job roles and the specific upskilling that is required.

“Talent is not the issue. The issue is capability. We have world-class engineers, but they have never worked inside a fab before. That’s the muscle we need to build,” Kumar further said.

To bridge this gap, experts suggest a large-scale training program where engineers gain experience in existing global fabs before returning to India.  

“The best way to build a skilled workforce is to send 1,000 Indian engineers to global fabs, have them train for two to three years, and bring them back. That’s how we’ll build real expertise.”  

Challenges in Building a Semiconductor Ecosystem

For semiconductor manufacturing to thrive, India needs more than just fabs. A full ecosystem, including chip packaging, testing infrastructure, and advanced research and development, is essential. 

Today, India lacks many of these elements, making it reliant on imports for key raw materials and equipment.  

Meanwhile, comparing India with the Netherlands, a small country with two key semiconductor firms but a massive global influence, Chaddah said India needs to identify niche areas where it can lead. “No one country has everything that it takes to have a fully self-sufficient semiconductor industry,” he added.

Rather than competing head-on with well-established semiconductor giants, India could specialise in areas where it already has expertise. Automotive semiconductors, AI-powered chips, and advanced materials like gallium nitride (GaN) and silicon carbide (SiC) are potential opportunities.  

“The car industry is a $200 billion market in India today and will only grow. The opportunity is to specialise in automotive chips; that’s where India can win,” Garg suggested.  

Moreover, at the VLSI Design Conference 2025, Ganapathy Subramaniam, founding managing partner at Yali Capital, stressed that two-wheelers could be a big opportunity for India. 

Recently, Bytes, a Bengaluru-based startup, launched a new AI-driven advanced driver assistance system (ADAS) for two-wheelers. 

Co-founders Prakhar Agrawal and Aayush Kumar aim to enhance road safety through deep-tech innovations in robotics, AI, and autonomous systems. 

Role of Government & Policy Support

While India’s semiconductor incentives are among the most generous globally, investment alone is not enough. These experts stress the need for consistent policy, infrastructure readiness, and alignment between market demand and manufacturing capabilities.  

“The first phase of India’s semiconductor push focused on fabrication. The next phase needs to build the ecosystem, including supply chains, testing facilities, and advanced R&D.”

Some even suggested that state governments should play a more active role in establishing semiconductor parks with shared infrastructure. This would lower entry costs for private investors and accelerate industry growth.   

The semiconductor industry is not just about setting up fabs – it’s about building an ecosystem that supports them.  

If India can align its investments, workforce, and supply chain strategies, it has the potential to become a major player in the global semiconductor industry. However, without careful planning and execution, profitability will remain a challenge.

The latest wave of US sanctions on chip exports has put China in the spotlight, forcing the country’s tech sector to adapt quickly. Chinese tech companies are actively investing in homegrown technologies in an attempt to mitigate the impact of US sanctions, particularly in the semiconductor sector. 

This reflects a broader strategy of self-reliance, driven by restrictions on access to advanced US technology. While official statements and industry developments indicate notable progress, significant challenges still lie ahead.

The Chinese embassy in the US said in a post on X that US President Donald Trump’s imposition of new tariffs on Chinese imports will not affect China. “If war is what the US wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.”

China Pushes Forward with New Innovations

With a strong local demand and supply chain, China has recently made a notable breakthrough in the semiconductor industry. The latest development is China’s latest silicon-free chip, which uses bismuth-based materials to bypass silicon-based restrictions. 

According to South China Morning Post, one key development of this 2D transistor from Peking University is that it reportedly operates 40% faster and uses 10% less energy than leading 3-nanometer silicon chips from Intel and Taiwan Semiconductor Manufacturing Company (TSMC).

Professor Hailin Peng, who is leading the project, described this as “changing lanes” in the semiconductor race, born out of necessity due to sanctions, forcing researchers to find fresh solutions.

On the other hand, C4D Lab, University of Nairobi’s R&D and innovation hub, expressed skepticism as it stated, “If true, silicon might need to start job hunting, do you think?” This leaves room for further debate as the chip’s real-world impact remains to be seen.

Moreover, companies like Huawei and Semiconductor Manufacturing International Corporation (SMIC) are making breakthroughs and challenging NVIDIA despite sanctions. 

Huawei is pushing forward with its Ascend 910C AI accelerator, which Lennart Heim, researcher at RAND, describes as China’s most advanced AI chip to date. 

According to Heim’s thread on X, the 910C is now entering production, largely through illicit procurement of advanced dies from TSMC, despite stringent US export controls. 

This backdoor sourcing could enable Huawei to produce up to 1 million chips equivalent to NVIDIA’s H100 this year, showcasing China’s determination to circumvent restrictions and maintain its position in the global AI race. 

The ability to exploit such loopholes highlights the challenges US policymakers face in enforcing export controls as Huawei taps into stockpiles of TSMC’s 7 nanometer technology and high-bandwidth memory (HBM2E) from Samsung, acquired before tighter regulations were implemented in January this year.

Heim emphasises that while the 910C’s per-chip performance is underwhelming, China can compensate by deploying larger numbers of accelerators, facilitated by its centralised control over resources. 

This approach could enable competitive AI models, particularly in areas like reasoning, as China harnesses the talent and compute power it has amassed. 

US Sanctions and Chinese Response

US sanctions on Chinese tech companies, particularly in the semiconductor industry, have intensified in recent years. 

These measures, such as adding firms to the Entity List and restricting exports, aim to limit China’s access to advanced technologies, especially chips critical for AI, military applications, and supercomputing, as reported by The New York Times.

In response, China has launched initiatives to reduce reliance on foreign technology, including the ‘Made in China 2025’ goal of achieving 70% domestic semiconductor production by 2025.

China’s strategy includes significant state funding, with billions invested in domestic chipmakers like SMIC and Yangtze Memory Technologies Corp (YMTC). 

This development is part of a broader trend, with China advancing in RISC-V processors and other non-silicon technologies. 

For instance, the XiangShan project aims to deliver a high-performance RISC-V processor by 2025, potentially reducing dependence on foreign technology, Slashdot reported. 

These innovations suggest that sanctions may be fuelling, rather than hindering, China’s tech sector. This claim was supported in 2023 by Xu Zhijun (Eric Xu), the rotating chairman at Chinese tech giant Huawei. He had said that China’s chip industry would be “reborn” as a result of US sanctions.

China’s Chip Ecosystem

While technological gaps remain between Chinese manufacturers and global leaders, massive government investment, including a $47 billion semiconductor fund launched in May 2024, and strategic focus accelerate development across all segments, gradually reducing dependency on foreign technology.

The core of China’s chip ecosystem revolves around major players like SMIC, YMTC, and ChangXin Memory Technologies (CXMT).

While Huawei and ByteDance are not directly involved in chip manufacturing, they are crucial in driving demand for advanced semiconductor technologies, particularly in AI infrastructure and mobile applications. 

SMIC, China’s leading pure-play foundry, achieved the position of world’s second-largest pure-play foundry in early 2024, despite international restrictions. It successfully developed 7 nanometer chips and announced plans for 5 nanometer production, making strides in chip manufacturing. 

In the critical memory sector, YMTC has established itself as China’s champion in NAND flash memory production. Founded in 2016, YMTC has progressed from basic memory architectures to complex 64-layer 3D NAND structures, marking the country’s entry into this strategic segment. 

Notably, CXMT serves as the country’s primary Dynamic Random Access Memory (DRAM) manufacturer, working to reduce dependency on foreign suppliers for this essential memory type. Hua Hong Semiconductor complements these efforts by manufacturing analogue, mixed-signal, and specialty semiconductors.

The equipment manufacturing sector, vital for true technological independence, includes Shanghai Micro Electronics Equipment (SMEE) and Advanced Micro-Fabrication Equipment Inc (AMEC). At the same time, Naura Technology Group offers semiconductor production equipment, reducing reliance on foreign technology providers.

China’s ecosystem also features innovative design houses, including HiSilicon (Huawei’s former chip design subsidiary), Zhaoxin (x86 compatible processors), and Loongson (MIPS-based CPUs), and UNISOC (mobile SoCs). 

These companies’ strategies are pivotal in countering US sanctions by reducing reliance on foreign technology. The country is also a global leader in semiconductor packaging, holding over a quarter of the global market share. This allows it to maintain influence in the supply chain despite US restrictions.

As the global tech race intensifies, China’s push for semiconductor self-sufficiency could disrupt global supply chains and redefine tech leadership. The impact of US sanctions has accelerated not only China’s domestic innovation but also that of various other countries. This could likely hint towards an era of protectionism for the global chip market.

The United States’ decision to impose a 25% tariff on semiconductors from April 2 has sent ripples through the global tech industry. India, an upcoming player in the semiconductor landscape, finds itself in a unique position to potentially capitalise on this decision.

While the US and other major semiconductor players grapple with the fallout, India remains relatively shielded. Ashok Chandak, president of the India Electronics and Semiconductor Association (IESA), noted that India is unlikely to experience major short-term consequences. 

Given it is not a major semiconductor exporter to the US, India’s import duty on semiconductors is already zero, eliminating reciprocal tariff concerns.

At the Saudi Arabia-based FII Priority Miami 2025 event held from February 19-21, US President Donald Trump revealed his plans to announce tariffs on cars, semiconductors, chips and others over the next month or sooner.

India’s Tariff Shield

In January, the US had sent shockwaves through the global tech industry when the then-Joe Biden and Kamala Harris administration announced a regulatory framework for the responsible diffusion of advanced AI technology.

Notably, India found itself excluded from the privileged list of 18 allied countries granted unlimited access, and instead, it was placed among the third-tier destinations that require explicit licensing.

This is not to say that India is entirely unaffected. The global semiconductor industry is interconnected, and disruptions in one region inevitably have ripple effects elsewhere. 

However, India’s focus on domestic semiconductor consumption, with upcoming manufacturing and Outsourced Semiconductor Assembly and Test (OSAT) facilities catering to global brands, positions the nation favourably. 

As domestic demand rises, domestic supply also grows, reducing the dependence on imports and alleviating the effects of tariffs. India’s focus on ‘Aatmanirbhar Bharat’ or self-reliant India, has also helped make India less reliant on global tech.

Tariff Tussle, Who Wins?

Earlier this month, Trump announced that the US will grant a one-month exemption from tariffs on imports from Mexico and Canada for US-based automakers. 

White House press secretary Karoline Leavitt additionally expressed that the president is “open” to hearing requests from other industries seeking exemptions as well.

The immediate impact of the tariffs is a rise in costs for US consumers. Countries like Taiwan, South Korea, and China dominate global chip manufacturing, and their products currently face a significant price disadvantage in the US market.

According to Chandak, the tariff will significantly increase the cost of semiconductors imported into the US, particularly from these countries. 

This cost increase inevitably translates to higher prices for electronics. Smartphones, laptops, electric vehicles, and various industrial electronics will become more expensive, impacting consumer spending and potentially dampening demand. 

US companies reliant on semiconductor imports, including tech giants like Apple, NVIDIA, and Tesla, will face increased production costs, squeezing profit margins or forcing them to pass expenses onto the consumer.

As highlighted by Brad Smith, vice chair and president of Microsoft, the Biden administration’s AI diffusion rule risks undermining US leadership in the global AI race. 

While intended to protect national security by restricting exports of advanced AI chips to adversaries like China, the rule imposes unnecessary quantitative caps on exports to many friendly nations, including India. 

This Tier 2 classification discourages American companies from building AI infrastructure in these countries, pushing them to seek alternatives—likely benefiting China’s rapidly expanding AI sector.

Smith also emphasised that such restrictions create uncertainty for US allies and partners, limiting their access to critical AI technology and stifling economic growth. 

Ironically, this comes at a time when American tech firms, like Microsoft, are prepared to invest billions globally in AI infrastructure, for example the recent $3 billion investment to expand Azure in India. 

Smith argued that simplifying the rule and eliminating caps while retaining robust security standards would not only strengthen US economic opportunities but also reinforce alliances critical in countering China’s influence in AI.

Beyond the Immediate Impact

The long-term implications of the tariff are more profound. The move could accelerate the trend toward regionalisation. 

Companies are incentivised to diversify supply chains, seeking tariff-free regions to source chips or increase domestic investments to mitigate risks. India stands to benefit from this shift. The US is also actively trying to attract chip manufacturing investments, but the tariffs could make other locations, including India, more attractive.

The establishment of new semiconductor manufacturing partnerships is complex and time-consuming. As per Chandak, semiconductor fabs are capital intensive, costing between $10 billion and $25 billion per site. 

Companies must carefully consider talent availability, tax policies, regulatory frameworks, and environmental conditions. India is actively working to improve its appeal in all these areas. However, entry barriers and scaling challenges stall India’s semiconductor push.

Shifting Alliances, New Opportunities

The US tariff has geopolitical consequences. Taiwan, with the Taiwan Semiconductor Manufacturing Company (TSMC) and South Korea, with Samsung, dominate semiconductor manufacturing. 

The tariff could strain diplomatic and trade relations with these key US allies, allowing other nations to strengthen semiconductor trade relationships.

Europe and Asia could enhance semiconductor collaboration to ensure independent supply chains. This potential shift underscores the move from globalisation to regionalised production hubs to mitigate future trade risks.

The US move might violate the Information Technology Agreement (ITA). This international treaty, signed by the US and many countries, aims to eliminate tariffs on information technology products, including semiconductors. 

This move could face resistance from major US semiconductor companies relying on Asian foundries and OSAT facilities.

Roadblocks Ahead

The US semiconductor industry is not standing still. While initiatives like the CHIPS and Science Act aim to incentivise domestic production, Trump recently gave a speech to the Congress to demote it. 

“The CHIPS act is a horrible, horrible thing. We give hundreds of billions of dollars and it doesn’t mean a thing. You should get rid of the CHIPS Act and whatever is left over, Mr Speaker, you should use it to reduce debt.”

Scaling US manufacturing requires significant investment and time, establishing high-volume, cost-competitive fabs takes years, even with government incentives.

The immediate benefits of the tariffs are limited. “No company will shut down an existing multi-billion-dollar fab to relocate operations overnight. Instead, new investments will be carefully planned based on long-term demand forecasts,” Chandak said.

The tariff encourages domestic production and aligns with US national security objectives but presents substantial risks. These risks include global supply chain disruption, increased consumer costs, and strained international trade.

Ultimately, companies prioritise zero tariffs on components and materials for semiconductor production over the chip itself. Broader supply chain implications could outweigh the tariff’s intended benefits.

In a significant move to bolster Karnataka’s image as the tech capital, the state government, on Friday, announced the Budget 2025-26, allocating a significant amount for AI initiatives. 

The state allocated ₹300 crore for a Fund-of-Funds and a corpus fund of ₹100 crore for deep tech development, while also setting aside ₹50 crore over five years for the Centre for Applied AI for Tech Solutions (CATS). 

The government pushed the startup ecosystem to expand further in cities like Mysuru, Mangaluru, Hubballi-Dharwad, and Kalburgi, with 10,000 job creations.

Presenting the estimated ₹4,09,549 crore budget, Karnataka Chief Minister Siddaramaiah announced development initiatives, positioning the state as a leader in technological innovation. 

Additionally, under the ‘Brand Bengaluru’ concept (to improve infrastructure, service delivery, and traffic management), ₹1,800 crore was allotted for 21 schemes during the financial year 2025-26.

AI in Governance and Education

The Karnataka AI cell is developing AI-based solutions using technologies like computer vision and Natural Language Processing (NLP) and LLMs to enhance governance. 

“An AI-based Government Order Summary and Information Extraction Tool will facilitate easy access to government information for officials and citizens, the CM said.  Additionally, the AI-driven IPGRS 2.0 was announced to improve public grievance resolution, placing Karnataka ahead in the digital administration game.

Focusing on the education sector, the government initiated the Kalika Deepa Programme in collaboration with Ek-Step Foundation, extending AI-based learning tools to 2,000 schools. The aim is to enhance students’ English and Kannada language skills and mathematical competencies.

Karnataka also launched an advanced attendance management system in all government departments using the latest technologies, such as AI and Geographic Information System (GIS). In addition, a ₹2 crore smart system is to be implemented using AI to provide transcriptions of court proceedings, translations of judicial documents, and other information.

As part of the ₹667 crore Bengaluru Safe City project, cameras have been installed across Bengaluru, out of which 10 drones have been implemented.​

To monitor and control vehicular traffic, AI-enabled electronic cameras will be installed at 60 places in Davanagere, Dharwad, Kalaburagi, Belagavi, Chitradurga, Haveri, Hospet, Bellari, Vijayapura, and Dakshina Kannada districts at the cost of ₹50 crore.

GCCs, IT and New Tech Get a Monetary Boost

Aiming to stimulate innovation and entrepreneurship in cities other than Bengaluru, a Local Economy Accelerator Program (LEAP) will be launched in the current year with a grant of Rs. 1,000 crore.

The state’s IT policy targets investments of $300 billion and job creation of 1.5 lakh, emphasising cloud computing and emerging technologies. 

Karnataka will develop Global Innovation Districts in Mysuru, Belagavi, Dharwad, and Bengaluru to strengthen its leadership in GCCs as well. The GCC Policy 2020-25 also aims for an investment of ₹5,000 crore, with an ambition of creating 3.5 lakh jobs.

Additionally, Karnataka State Electronics Development Corporation Limited (KEONICS) will establish three new Global Technology Centres in Mangaluru, Hubli, and Belagavi as plug-and-play facilities.

The budget announcement also included Quantum Research Park Phase-2, to be set up with a grant of ₹48 crore over three years in collaboration with the Indian Institute of Science, Bengaluru.

Semiconductors and Electronics

The budget announced the building of a state-of-the-art PCB Park will be developed in Mysuru on 150 acres, creating a dedicated ecosystem for electronics manufacturing, with an addition of ₹99 crore SensorTech Innovation Hub to encourage sensor research and development.

In the broader context, Karnataka’s semiconductor ambitions are gaining momentum, with companies like Microsoft, Intel, Accenture, and IBM committing significant investments. 

The state’s Industrial Policy 2025-30, unveiled at Invest Karnataka 2025, aims to create 2 million jobs and attract substantial investments in sectors like semiconductors and renewable energy. The Union budget for 2025–26 also supports these efforts with an increased allocation for semiconductors and electronics manufacturing. 

To encourage electronic vehicle (EV) manufacturing and usage, a testing track of international standards and a state-of-the-art EV cluster with common infrastructure will be established around Bengaluru at a cost of ₹25 crore.

The Karnataka Biotechnology Policy also aims to attract ₹1,500 crore investments through incentives, while the data centre policy aims for an investment of ₹10,000 crore with a total capacity of 200MW.

Additionally, Karnataka’s AVGC-XR Policy 2024-29 also sees an investment of ₹150 crore with 30,000 jobs to be created.

The state signed MoUs totalling ₹10.27 lakh crore at the Global Investors’ Meet 2025, held in February this year, expecting to create over 600,000 job opportunities. The government envisions positioning itself as a hub for Artificial Intelligence (AI), AI-driven governance, education, electronic manufacturing, deep tech, Global Capability Centres (GCCs), biotechnology, and IT.

The narrative of real-time applications of quantum computing has been a topic of debate for a long time. While some believe that it will take just around five years for the industry to churn out useful computers, many others say that it’s going to be at least a two-decade-long process. 

According to recent projections, the quantum computing market is expected to reach $1 to 2 billion annually by 2030. This only highlights the growth potential of this industry. 

Last year, the United Nations General Assembly (UNGA) had declared 2025 as the International Year of Quantum Science and Technology (IYQ), and considering the recent developments in just the past two months, this prediction may as well come true.

A Five-Year Medley

With Amazon’s release of Ocelot, its new quantum computing chip, the race for computing has become even more competitive. The company claimed that compared to current approaches, the chip can reduce the costs of implementing quantum error correction by up to 90%.

When asked about his stand on Ocelot in the ongoing debate between two decades or five years of quantum, Andy Jassy, CEO at Amazon expressed in an intervew, “I’m hopeful that it’s more in the five-year range than it is in the 20-year range.”

He further highlighted that many significant innovations, such as generative AI, appear to be “overnight successes” but are often the result of decades of foundational work. 

For instance, while generative AI seems like a recent breakthrough, it is an evolution of AI research spanning over 50 years. The technology became impactful when it became more accessible and functional.

Jassy drew parallels with quantum computing, which has been in development for over a decade. He explained that such technologies often progress gradually before reaching a point where they solve previously intractable problems in a cost-effective manner. 

This sudden leap creates the illusion of overnight success. However, Jassy emphasised that the “euphoria” following these breakthroughs requires careful evaluation to determine their long-term impact and sustainability.

In a recent statement, Microsoft co-founder Bill Gates said that quantum computing could become useful within three to five years. 

While acknowledging that unforeseen challenges might arise, Gates’ outlook suggests he believes that the foundational breakthroughs needed for practical quantum applications are already in place or rapidly approaching. 

Microsoft also recently announced Majorana 1, which it claims to be the world’s first quantum chip utilising topological qubits. The company earlier claimed the chip will enable quantum computers capable of solving “meaningful, industrial-scale problems in years, not decades”.

Moreover, Hartmut Neven, founder and head of Google Quantum AI, has publicly stated that Google aims to release commercial quantum computing applications within five years. Last month, Neven expressed optimism about the timeline, and declared, “We’re optimistic that within five years we’ll see real-world applications that are possible only on quantum computers.”

Jensen Huang Disagrees

During an analyst event at CES, NVIDIA founder and CEO Jensen Huang suggested that bringing “very useful quantum computers” to market could take decades, citing the need for quantum processors, or qubits, to increase by a factor of 1 million. 

“If you kind of said 15 years… that’d probably be on the early side. If you said 30, it’s probably on the late side. But if you picked 20, I think a whole bunch of us would believe it”, he said.

This single statement from Huang triggered a massive selloff in the quantum computing sector, erasing approximately $8 billion in market value, according to reports. 

The quantum computing companies’ stocks witnessed a sharp decline. For instance, IonQ shares fell over 31.65%, Rigetti Computing dropped by 37.25%, and D-Wave Quantum Systems saw its stock tumble down by 25.61% after Huang’s statement.

Speaking in a recent podcast, Meta CEO Mark Zuckerberg also expressed skepticism about the near-term potential of quantum computing. “I’m not an expert on quantum computing, my understanding is that it’s still quite off from being a very useful paradigm.”

Moreover, Ivana Delevska, founder and chief investment officer at Spear Advisors, also concurred with the 15-20 year timeline, stating that it “seems very realistic”.

However, countering his claim, Quantum leaders were quick to challenge and form an alternative narrative. Alan Baratz, CEO of D-Wave Quantum Systems, dismissed Huang’s comments on quantum computing while calling them “dead wrong”. Baratz pointed to clients like Mastercard and NTT Docomo, who already use their quantum systems for business operations. 

$NVDA $QBTS

TODAY JENSEN HUANG SAID THAT QUANTUM COMPUTING WAS 20 YEARS AWAY FROM BEING USEFUL.

DWave Quantum $QBTS was down as much as 49% after these comments and ended the day down 36%.

The stock is up 1000% from the September lows.

The CEO of DWave says in this clip… pic.twitter.com/2hGf9ZSS0R

— amit (@amitisinvesting) January 8, 2025

He acknowledged that Huang’s timeline might apply to gate-based quantum computers but argued it was “100% off base” for annealing quantum computers.

After Huang’s statement, J Keynes, a long-time investor in the quantum computing space, took to X to point out a big gap between the expectations of companies and academics regarding when quantum computing will take off. He believes it is time for the industry to show real results. 

Moreover, he added that long-term investors require validation through performance, not just market enthusiasm. According to him, just making progress in the lab or getting government contracts isn’t enough; there needs to be actual sales and practical uses that make money. 

2 Months of Continuous Developments 

The past two months have underscored 2025 as a pivotal year in quantum computing, marked by significant breakthroughs, apart from Microsoft and AWS leading to increasing competition. 

While Google’s recent quantum chip, Willow, took over the internet after its release for suggesting the possibility of a ‘multiverse’, many critics questioned the tech giant’s bold claims. They said the tech giant’s claims were based on a flawed benchmark and that it has no real-world applications.

The chip even sparked a visionary exchange between Google CEO Sundar Pichai and SpaceX’s Elon Musk. 

Beyond the notable advancements by these giants, other key players are making significant strides, further enriching the quantum landscape.

PsiQuantum, an American quantum computing company, has unveiled its Omega quantum photonic chipset, designed for large-scale quantum computing applications. 

Manufactured in collaboration with GlobalFoundries, Omega integrates advanced photonic components capable of high-fidelity qubit operations and efficient chip-to-chip interconnects. 

The company plans to establish quantum compute centres in Brisbane, Australia, and Chicago, Illinois, by the end of 2027.

Meanwhile, Rigetti Computing and Quanta Computer have entered a strategic partnership to accelerate the development and commercialisation of superconducting quantum computing technologies.

In the past month, while AI enthusiasts celebrated the Chinese AI startup DeepSeek’s low-cost R-1 model, which was built with minimal GPUs and capital, the market responded rather brutally. NVIDIA lost nearly $600 billion as its stocks tumbled 17% owing to the efficiency with which the model was built. 

More recently, DeepSeek-V3 used just 2,048 NVIDIA H800 GPUs to outperform most open-source models. In contrast, xAI’s Grok-3 was trained on over 100,000 GPUs, yet beats DeepSeek-R1 by just a small margin. 

This made the chip market question whether such large numbers of GPUs were even needed to train these models. However, the story has multiple layers, and DeepSeek’s achievements may not hurt the chip demand after all. 

Experts speculate that the Chinese company may not be revealing the whole truth. During an interview, the CEO of Scale AI, Alexandr Wang, said that he believed DeepSeek possessed around 50,000 NVIDIA H100s, but wasn’t permitted to talk about it.

Jensen Huang Clarifies

NVIDIA chief Jensen Huang recently addressed this market reaction, asserting that investors misinterpreted the implications of the Chinese firm’s developments. 

During a conversation with DDN’s Alex Bouzari, he emphasised that DeepSeek’s R1 model was built using less powerful chips and significantly lower funding than their Western counterparts. This led to the dramatic sell-off of NVIDIA stocks.

“From an investor perspective, there was a mental model that the world was pre-training, and the inference was that you ask an AI a question, which instantly gives you an answer. I don’t know whose fault it is, but obviously, that paradigm is wrong,” he said.

However, Huang believes this reaction stemmed from a misunderstanding of the AI landscape, particularly the ongoing need for high-performance computing in post-training processes, which is essential for AI functionality.

He pointed out that while DeepSeek’s innovations are exciting and energising for the AI sector, they do not diminish the demand for NVIDIA’s chips. Huang explained that post-training methods—where AI models make predictions or draw conclusions after initial training—remain critical and require substantial computing power. 

As DeepSeek continues to generate interest and discussion across various tech sectors, including earnings calls of major companies like Airbnb and Palantir, it is clear that its impact on AI development will be significant.  

Analysts have noted that while DeepSeek’s cost-effective approach may disrupt traditional chip demand, it could also increase competition and innovation within the semiconductor industry. Companies like AMD and Intel may find opportunities to expand their market presence as AI adoption grows, driven by more accessible technologies.

ASML Saw Nearly 9% Rise in Shares

Shortly after the NVIDIA sell-off, Netherlands-based ASML, a leading manufacturer of chip-making equipment, saw shares jump nearly 9% when the company reported a sharp rise in net bookings in the fourth quarter ending December 2024. 

Earlier that week, ASML’s stock had suffered a blow amid the global tech sell-off following DeepSeek’s rollout of its R1 reasoning model, which claims to outperform OpenAI’s o1 in both cost and efficiency. 

The launch had raised concerns that AI firms might reduce spending on advanced chips, potentially impacting ASML’s extreme ultraviolet (EUV) machines, which produce high-end semiconductors. However, CEO Christophe Fouquet dispelled the fears of a slowdown, stating that lower AI costs could drive greater demand for semiconductors.

“A lower cost of AI could mean more applications. More applications mean more demand over time. We see that as an opportunity for more chip demand,” Fouquet told CNBC.  As a result, ASML said net bookings totalled €7.09 billion, marking a 169% increase from the previous quarter. The figure exceeded analyst expectations of €3.99 billion, signalling continued demand for its chipmaking tools.  

The company’s net sales reached €9.26 billion, surpassing the expected €9.07 billion, and its net profit was €2.69 billion, slightly above the €2.64 billion forecast.  
Despite concerns, ASML’s latest results suggested continued strength in semiconductor demand, reinforcing its position as a key supplier in the AI-driven chip industry.

Apple has unveiled its first custom-designed modem chip, a move set to reduce the company’s reliance on Qualcomm and reshape the landscape of wireless technology integration in its devices. 

For years, Apple relied on Qualcomm for modem chips, which other players also use. This shift indicates a new direction for Apple’s hardware strategy.

The chip, part of Apple’s new C1 subsystem, debuted in the $599 iPhone 16e. Executives anticipate a rollout across Apple’s product line in the coming years.

While this is a significant breakthrough for Apple in establishing itself as an in-house hardware manufacturer, the company downplayed this development extensively in its announcement, which was widely about the debut of its new iPhone 16e.

C1’s Core, Power and Efficiency

The C1 subsystem, which houses processors and memory, promises to provide iPhones with longer battery life, the company claimed.  

Apple’s Kaiann Drance, vice president of iPhone product marketing, told Reuters that the iPhone 16e has the best battery life of any of its 6.1-inch phones thanks to the C1 system. The iPhone 16e will also feature Apple’s latest AI features as well.

Max Weinbach, a tech analyst at Creative Strategies, elaborated on this in a post on X.

With iPhone 16e, Apple is doing their new in-house Apple C1 modem.

This modem does the usual 4G/5G (sub-6 GHz), as well as Satellite and GPS connectivity.

Because of the vertical control this gives Apple, it's about 25% more energy efficient than previous iPhones pic.twitter.com/y10reU7I2h

— Max Weinbach (@MaxWinebach) February 19, 2025

Creating modem chips is complex because they must be compatible with hundreds of carriers in many countries. 

Only a few companies, including Samsung, MediaTek, and Huawei, have successfully created one. Apple’s entry into this exclusive group demonstrates its commitment to technological innovation and could really change the course of this sector.

Apple’s relationship with Qualcomm has been complex. In 2019, after a legal battle, the companies settled and signed supply agreements. This followed Intel’s failure to deliver a viable alternative. 

Understanding How it Works 

The baseband modem uses advanced 4-nanometre chipmaking technology. A transceiver is made with 7-nanometre technology. 

Johny Srouji, Apple’s senior vice president of hardware technologies, also told Reuters that the chips were tested with 180 carriers in 55 countries. This ensures they work in all places Apple ships iPhones. “C1 is the start, and we’re going to keep improving that technology each generation,” he added.

One way Apple hopes the C1 will set its iPhones apart is by integrating it with its processor chips. 

The C1 chips also feature custom GPS systems and satellite connectivity when iPhone users are away from mobile data networks. However, they will lack some features. 

They won’t connect to millimetre wave 5G networks, one of Qualcomm’s strongholds. Srouji said Apple’s goal was not to match the specifications of its chip rivals but to design products specific to Apple’s needs.

“We’re not the merchant vendor to compete with Qualcomm and MediaTek and others. I believe we’re building something truly differentiating that our customer will benefit from,” he said.

However, Apple has not responded to AIM’s questions about when its chips will have this technology or how quickly it will phase out Qualcomm’s chip.

Franci Penov, an angel investor, commended the potential of this breakthrough on X, saying that no one else has a higher density of devices, at least in the US. 

Apple C1 modem is needed for them because it opens the possibility for Apple doing mesh networking in a controlled, power efficient, and authenticated manner.

There are bunch of consumer scenarios that can benefit from this.

But more importantly, optimized mesh networking means…

— Franci Penov (@francip) February 20, 2025

Seven Years in the Making

According to a report in the Wall Street Journal (WSJ) from 2023, Apple CEO Tim Cook issued ‘marching orders’ to design and develop a modem chip. This led to the company hiring thousands of engineers, and the idea was to reduce Apple’s dependence on Qualcomm. 

WSJ also revealed that Apple planned to use the modem chip on the iPhone 15 series, but tests revealed that the chip was ‘too slow’ and was subjected to poor thermal performance. 

Moreover, engineers working on the project were affected by ‘poor communication’ among other technical challenges, and several managers were left discouraged from delays and divided opinions on the project. 

“Just because Apple builds the best silicon on the planet, it’s ridiculous to think that they could also build a modem,” former Apple wireless director Jaydeep Ranade told WSJ. 

Well, Apple may be a year or two late, but the chip is finally here. 

Qualcomm anticipates that its share of Apple modems will drop from 100% to 20% by next year. However, the technology licensing agreement between the companies will remain in place until at least 2027.

Overall, this is a big blow to Qualcomm, more specifically in the context of modems. According to reports, even Google is considering Chinese chip maker MediaTek over Qualcomm for modems in its upcoming Pixel 10 series of smartphones. 

According to reports from Android Authority, Google is planning to use MediaTek’s yet-to-be-released T900 modem. Google reportedly evaluated multiple options, including the Qualcomm Snapdragon X75 modem, which is used on the iPhone 16, before eventually choosing MediaTek. 

[With inputs from Supreeth Koundinya, tech journalist at AIM]

India’s solar energy sector is undergoing a massive transformation, led directly by ‘PM Surya Ghar: Muft Bijli Yojana’, the world’s largest rooftop solar initiative. The goal is to bring solar power to one crore households by March 2027. 

As installations rapidly increase, with over 10 lakh installations expected by next month, the numbers are expected to double by October this year, reach 40 lakhs by March 2026, and ultimately achieve the target of one crore by March 2027. 

Bengaluru-based Skylark Drones is at the forefront of transforming the renewable energy sector and making a significant impact by offering AI-powered drone technology to automate solar panel inspections, detect defects, and optimise performance. 

This approach enhances the quality and volume of data collected, reduces costs and ensures worker safety.

In an exclusive interview with AIM, Mughilan Thiru Ramasamy, co-founder and CEO of Skylark Drones, revealed the startup’s plans to scale its drone imaging processes for solar panels in various cities of India. He further shared insights into the company’s diverse projects and their impact on the industry.

The company is actively involved in projects ranging from rooftop solar potential mapping to solar panel defect detection, showcasing its commitment to enhancing the efficiency and safety of solar energy infrastructure.

India’s First Software for Spray Management

On Tuesday, the startup unveiled Drone Mission Ops (DMO) for agriculture, India’s first software platform that is set to transform how agricultural drones are managed and operated across the country, at the Krishi Darshan Expo 2025 in Hisar. 

The platform, compliant with the Directorate General of Civil Aviation (DGCA), offers features such as real-time fleet management, crop-specific recommendations, and automated health monitoring. It is also accessible in local languages. 

While the company has already executed over 10 million autonomous drone flights and processed over 100 million drone images across more than 120 enterprise customers nationwide, it still faces challenges, including regulatory hurdles and the need for greater awareness and adoption of drone technology.

The company is backed by investors, including Thakral Corporation, Info Edge Ventures, AdvantEdge Partners, Turbostart, IIM Udaipur Incubation Centre, and Hunch Ventures.

Mapping Rooftop Solar Potential

Skylark Drones collaborated with the renewable energy ministry to map rooftop solar potential across 120 Indian cities. 

The scale of the project is vast, with the company mapping around 10 crore to 20 crore roofs across these cities in just about six months. 

By using drones with high-resolution imaging (five centimetres per pixel data), Skylark can determine the optimal number of solar panels for a given roof and estimate the power generation potential. 

The PM Surya Ghar scheme, launched by PM Narendra Modi on February 13 last year, offers households a subsidy of up to 40%, making renewable energy more affordable and accessible. 

Within nine months of the launch, 6.3 lakh installations were completed, resulting in a monthly installation rate of 70,000 – ten times higher than the pre-scheme average. 

The program aims to benefit one crore households and is expected to save the government ₹75,000 crores annually in electricity costs. 

The startup faces competition from players like Asteria Aerospace, ideaForge and Envoler Innovations, which offer drone-based solutions for anomaly detection, plant surveillance, and thermography. 

Other notable companies contributing to drone applications in solar energy include FlyNex and global players DJI Enterprise.

Skylark claims to have worked on over 2.25 GW of energy for players like Bosch, CleanMax Solar, SB Energy, Sterling and Wilson, Sprng Energy, etc. 

Real-Time Inspection and Dust Detection 

Skylark Drones also focuses “on automatically detecting defects in solar panels” to optimise energy production. 

When it comes to ground-mounted solar installations, where “there are nearly one lakh solar panels”, identifying defective panels is crucial. The startup provides a mapping service that pinpoints the exact location of defective panels, enabling targeted maintenance and improved energy output.

The company’s work with CleanMax Solar involves perimeter surveillance and real-time inspection of a 350 MW plant spanning approximately 1,500 acres. 

Using drone technology integrated with dock stations, Skylark monitors the perimeter and identifies defects. “We have a real-time defect identification software where the drone automatically goes to the panel and identifies this defect,” Ramasamy stated. 

Drones equipped with dock stations monitor the perimeter at night, identifying defects in real time. The system notifies personnel of the specific panel requiring inspection and repair, allowing for immediate action.

Moreover, the company is developing a ‘dust detection module’ to identify dust accumulation on solar panels, which could potentially be used in applications for targeted drone cleaning solutions. “You can have a spraying drone, which will go spray only those places which are dirty,” Ramasamy said.

This technology can optimise cleaning schedules and reduce water consumption through targeted spraying for facilities with hundreds of thousands of panels. The company envisions a future use case where drones will be equipped to clean solar panels, further reducing water usage, manual labour, and maintenance costs. 

“Cost per unit of solar will reduce because maintenance cost and water wastage now reduces and we can save at least 10 paise to 20 paise like this,” Ramasamy pointed out.

Skylark Drones’ approach to solar power, integrating mapping, defect detection, and real-time inspection, underscores its commitment to revolutionising the industry through drone-based solutions.

Moreover, the company is involved in flood risk assessment for solar farms, helping companies to strategically install solar parks in safer locations.

Not Limited to Solar

Skylark is creating a software platform to scale solutions for various companies, each with different use cases. 

Ramasamy explained that while scaling these solutions can be difficult and requires a lot of account-based management, there is so much scope for learning from every customer interaction.

Instead of simply applying a one-size-fits-all solution, the company focuses on understanding each client’s unique problems and tailoring a solution from their “basket” offerings. For example, they recently closed a deal with GPS Renewables, a biogas manufacturer.

The startup has also worked with companies such as Tata to monitor stockpiles and use drones to estimate the volume of excavated minerals in stockyards. 

This data is displayed on a dashboard, enabling clients to monitor stock levels, perform FIFO (first in, first out) analysis, and determine shipping priorities.

“They excavate all their mine minerals and put them in a stockyard. We fly our drone on a daily basis to estimate how much volume is there in the stockyard.”

In the case of biogas, the company requires a volume dashboard. “The stockyard shrinks daily by some centimetres, and we monitor how much is shrinking and provide appropriate services.”

Moreover, with other partners like UltraTech Cement, the startup carries out seamless Mineral Conservation and Development Rules-compliant drone surveys and inspections.

By transforming drone data into actionable insights, the drone industry is set to revolutionise sectors beyond solar power, including mining, infrastructure, and more.

With about 200 Indian-based space startups, the majority of which are based in Bengaluru, the city is well-positioned to become a major global player in commercial space. 

These startups have created a growing ecosystem of companies working on satellite manufacturing, propulsion systems, and space-based data solutions. However, for long-term success, scaling beyond research and development into full-system integration and satellite manufacturing will be crucial.

Experts at the Invest Karnataka 2025 panel discussion on the ‘Future of Commercial Space’ highlighted the gaps that need to be addressed for the city to emerge as a global space hub.

Former ISRO chairman S. Somanath acknowledged Bengaluru’s leadership in space innovation but also pointed out that the city lags behind in producing a fully integrated communication satellite. 

“There are small satellite-building companies, but I hope to see a four-tonne or six-tonne class communication satellite built by an Indian company and launched from Bengaluru,” he said.

“We see startups focusing on components, but I have yet to see a fully integrated product emerging from Bengaluru.”

Despite the growth of the private sector, gaps in manufacturing continue to be a significant limitation. However, the panellists highlighted Bengaluru’s potential to emerge as a major satellite hub. 

India is Expanding Global Collaborations

The Union Government has announced several initiatives to support private space companies, including a ₹1,000 crore venture capital fund to encourage investment in space startups. The fund is expected to boost investors’ confidence, with ISRO backing commercial ventures in their early stages.

Husain Suterwala, a senior space policy advisor in the Office of the Secretary of Defense (OSD), noted that Indian startups have already secured contracts with the U.S. Space Force, highlighting their global competitiveness. 

“Several Indian startups have won U.S. contracts for Space Situational Awareness (SSA) and satellite imaging,” he said, mentioning companies like Digantara and Pixxel.

Notable space startups in the city include Bellatrix Aerospace, GalaxEye, KaleidEO, EtherealX, Aadyah Space, and SatSure, among others. 

Besides these, several space startups are spread throughout the country. For instance, Ahmedabad-based PierSight has been building the world’s first constellation of SAR+AIS satellites dedicated to ocean surveillance, and Hyderabad-based TakeMe2Space has been building India’s first AI lab in orbit. The founder of the startup told AIM that the startup also aims to launch two fully operational satellites this year to build in-orbit computing.

Meanwhile, Jay Gullish, executive director at the U.S.-India Business Council, pointed out that initiatives like Indus-X and I2A are fostering collaboration between Indian and American companies. These programs pair Indian startups with U.S. firms to co-develop and co-produce space technologies.

The discussion also touched on the importance of regulatory reforms to attract more foreign investment. Panellists emphasised that while India has liberalised foreign direct investment (FDI) in space, clearer regulations and streamlined processes are needed to boost private participation.

What’s Next for Bengaluru’s Space Ambitions?

While the city is leading India’s commercial space industry, experts say the next phase of growth will depend on investment in large-scale manufacturing, policy clarity, and stronger public-private collaboration. 

Somanath highlighted the need for state-backed infrastructure like space parks, similar to Software Technology Parks of India (STPI), to support hardware manufacturing and testing.

Over the past few years, humanoids have become the talk of the internet, thanks to breakthroughs in artificial intelligence (AI), machine learning (ML), synthetic data and robotics. Companies worldwide are racing to deploy intelligent, autonomous humanoids that can work alongside humans in industrial environments.

As seen in recent collaborations between major AI and robotics firms, such as Apptronik, Google DeepMind, NVIDIA and Foxconn, companies strive to create versatile robots capable of dynamic, real-world tasks. 

With an increasing focus on efficiency, safety, and automation, humanoids are poised to become an essential part of the workforce. Companies like FigureAI, Tesla, UBTECH, Agility Robotics, and Addverb are now exploring humanoids.

In an interview with AIM, Satish Shukla, co-founder of Addverb, discussed the company’s plans to launch its humanoid this year and his views on the future of humanoids.

Shukla believes it will take another three to four years for humanoids to become as prevalent as humans. “For every human, we probably might have one humanoid,” he said.

Addverb focuses on AI, computer vision, and gesture-based control to expand its portfolio of autonomous and semi-autonomous robotic solutions. The company also claims to address industrial bottlenecks in warehouse operations, e-commerce logistics, and security automation.  

Humanoids to Enter Soon

As per Shukla, Addverb aims to launch its first humanoid robot in Q4 (October to December) of 2025. Unlike traditional robotic automation, humanoid robots offer the advantage of seamless integration into human-centric environments without requiring major infrastructure changes.  

“We don’t see it as a consumer product per se, but it could find application in…a burger joint, but not for a personal user or consumer-based,” Shukla added. 

The robot could function in workplaces such as warehouses, healthcare facilities, and security operations, where automation has yet to fully replace manual processes. He also noted that while humanoid robotics is advancing, widespread adoption will take time.  

These robots will evolve through iterative upgrades, ensuring robustness and adaptability for various industries. The company is leveraging its partnerships with Reliance and other innovation-focused firms to refine and test its humanoid solutions before a large-scale rollout.

In November last year, Addverb’s co-founder and CEO, Sangeet Kumar, said that the company would initially unveil 100 robots in 2025, which would be used across various industries, including energy and retail.   

He noted that the humanoids are advancing at a pace comparable to those in the US, China, and Europe in terms of speed, height, and dexterity. The focus is on commercialising military-grade robots and exploring their deployment on Mars.

Trakr 2.0 Advances Quadruped Robotics  

Trakr 2.0, to be launched at LogiMAT India 2025, is an upgraded version of Addverb’s quadruped robot designed for industrial, security, and healthcare applications. It features a payload capacity of 20 kg, a 90-minute battery life, and stereo cameras for improved autonomous navigation.  

Unlike conventional wheeled robots, Trakr 2.0 operates on four legs, allowing it to traverse complex industrial terrains. It takes the company from “wheeled robotics to legged robotics”, according to Shukla. The robot is intended for warehouse automation, security patrolling, and disaster management applications.  

Addverb previously introduced quadruped robots for warehouse coordination, but Trakr 2.0 expands its use cases to healthcare logistics, surveillance, and industrial maintenance. 

“There will be a fleet of quadrupeds that will display agility, coordination, better planning, efficiency and overall collective intelligence of how a group of quadruped can perform different tasks,” Shukla said.

The robot’s integration with AI-based perception systems positions it as a potential alternative to traditional security and monitoring solutions. The stereo cameras enhance vision-based navigation, allowing the robot to function in low-light and dynamic environments.

Shukla expressed that the robotics and automation industry requires a specialised skill set, but the availability of trained professionals remains limited. Addverb acknowledges this gap and focuses on hiring young engineers willing to learn and experiment. Addverb has a global workforce, with professionals from over 60 nationalities contributing to product development. The company runs internal upskilling programs to prepare training graduates from campuses.

Warehouse Automation Gets Smarter with Gesture-Based Picking

Syncro is Addverb’s collaborative robot designed to automate picking operations with AI-driven precision. It enhances efficiency by executing pick-and-place tasks with minimal manual intervention. 

With a payload capacity of up to 10 kg, an extended reach of 1,300 mm, and a speed of 1 m/s, Syncro ensures faster order fulfilment while maintaining 99.9% picking accuracy.  

The robotic picking arm grips and lifts items from storage containers with precision. Customisable end-of-arm tooling and multi-axis movement make it adaptable for handling various stock-keeping units (SKUs). Syncro also facilitates decanting by efficiently transferring items from source bins to destination bins, optimising warehouse automation.

Another innovation, HOCA (high-order carousel automation), is an advanced batch-picking system designed for warehouses that require high-volume, space-efficient automation.

The system can handle payloads of up to 54 tons while operating within a compact picking zone of 5–10 square metres.

Its design enables automated goods retrieval, eliminating the need for manual aisle navigation. The system claims to ensure an accuracy rate exceeding 99%, reducing errors in inventory management and optimising order fulfilment workflows.  

According to Shukla, HOCA is built for e-commerce fulfilment centres, dark stores, and large-scale industrial storage. The batch-picking feature allows multiple orders to be processed simultaneously, a function aimed at businesses experiencing seasonal demand spikes. 

Moreover, Brisk, another launch by the company, introduces gesture-recognition technology into warehouse operations, allowing workers to execute tasks with minimal manual effort. The system incorporates a glove-based EAN reader that facilitates barcode scanning, accelerating the order processing cycle.  

Designed to reduce non-value-adding movements, Brisk replaces traditional walking-and-picking workflows with an automated goods-to-person system. 

The interface adapts to varied lighting conditions, ensuring smooth operation in low-visibility warehouse environments.  

Brisk builds on Addverb’s existing work in computer vision, reinforcement learning, and AI-driven automation. The product will target e-commerce, large-scale retail warehouses, and manufacturing hubs where manual picking inefficiencies impact productivity.  

Why Reliance?

Reliance is a strategic investor in Addverb, which provides a platform for developing and testing automation solutions across multiple industries. With business verticals spanning petrochemicals, retail, digital services, fashion, e-commerce, and new energy, Reliance offers a broad environment for deploying robotics and automation technologies. 

As Shukla explained, Addverb has worked on several key projects within Reliance, including a remote ultrasound solution, a 5G-enabled robot for the Jamnagar Refinery, and automation for returns handling in retail, grocery, and fashion operations.

This partnership enables Addverb to scale its solutions rapidly, allowing for real-world testing in a collaborative environment. 

Implementing automation at Reliance’s operational scale gives the company a controlled environment to refine its products before expanding globally. The relationship also accelerates product development and market entry, helping Addverb bring innovations to market faster.

While Reliance plays a crucial role in infrastructure and deployment, Addverb is also working with Intel, NVIDIA, and Siemens to develop robotics and automation solutions. 

While Addverb competes with major industrial robotics firms, including ABB, which focuses on industrial robotic arms, mobile robots, and cobots, competitors rely heavily on simulation and synthetic data for robot path planning. 

Addverb takes a different approach by controlling the entire end-to-end supply chain, from conceptualisation to deployment. The company has dedicated in-house teams for research and development, embedded systems, electrical engineering, manufacturing, and software development.  

This structure allows Addverb to reduce hardware complexity, cost, and weight. The ability to implement over-the-air (OTA) updates ensures continuous improvement post-deployment. 

Addverb has also developed custom controllers, enabling better optimisation of robotic functions. With over 350 customers and its own manufacturing facility, the company generates large-scale real-world data to refine automation systems.

The Indian Army has been rapidly embracing AI and autonomous systems to enhance national security while minimising human risks in combat. As modern warfare evolves, the military is prioritising indigenous innovations, ensuring self-reliance in defence technology. 

This transformation aligns with India’s Aatmanirbhar Bharat initiative, which seeks to reduce dependence on foreign military imports.  

India has been an early adopter of generative AI in defence. In 2018, the country established the Defence Artificial Intelligence Council (DAIC) to drive innovation. 

Despite its efficiency, AI in combat remains a challenge. While AI enhances operations, human decision-making remains superior in unpredictable battle scenarios. For now, AI’s role is focused on predictive maintenance and manned-unmanned operations. 

Meet Major Rajprasad  

Major Rajprasad RS, a service innovation officer in the Indian Army Corps of Engineers from the Army Design Bureau and the 7 Engineer Regiment, is at the centre of this change. He has developed groundbreaking innovations that could redefine battlefield tactics. 

He has demonstrated homegrown defence solutions by developing twelve cutting-edge military technologies, four of which have already been inducted into the Indian Army.

Speaking to AIM at the Aero India 2025 event in Yelahanka, Bengaluru, he described his innovations as fully operational battlefield solutions designed to increase combat effectiveness and reduce casualties.  

His latest innovations, Xploder and the Mobile Reactive Mine System (MRMS), were showcased to defence minister Rajnath Singh at the India Pavillion. 

These revolutionary systems have also gathered national attention, even drawing interest from Prime Minister Narendra Modi and Indian Army chief general Upendra Dwivedi. Their induction into the Indian Army marks a significant shift in how India prepares for future conflicts.

Xploder: The AI-Powered Kamikaze  

One of Major Rajprasad’s most promising innovations is Xploder, an unmanned ground vehicle (UGV) designed to enhance safety in counter-insurgency and counter-terrorism operations. 

This six-wheeled, all-terrain vehicle is built for high-risk scenarios where human intervention can be fatal.  

Xploder is capable of reconnaissance, explosive payload delivery, and (improvised explosive device) IED disposal. It can be remotely controlled to enter dangerous areas, identify threats, and neutralise them without risking human lives. 

“In the aspect of room intervention in counter-terrorism operations, going inside each and every room and searching is difficult due to the risk of casualties because the militant can be anywhere, and it is a long-drawn process. So, this is used for reconnaissance in case a militant is found,” Major Rajprasad said.

Additionally, it can function as a kamikaze device programmed to detonate in enemy hideouts, making it a formidable weapon in urban warfare. The Indian Army is already considering mass procurement of Xploder, signifying its importance in modern military strategy.  

MRMS: A Walking Mine Hunting Its Target  

Traditional landmines are static and pressure-activated worldwide, which pose risks even to friendly forces. Moreover, they are used for defence purposes, mostly to harass, deny, and delay the enemy. 

Major Rajprasad’s MRMS introduces a radical departure from conventional mine warfare. This advanced mine system mimics the mobility of a spider, actively searching for its target instead of waiting for them to step on it. He calls it a “reactive mine”.

The MRMS can be deployed via unmanned aerial vehicles (UAVs), drones or ground vehicles, allowing it to be dropped directly into enemy zones. 

Once activated, it navigates towards enemy vehicles and detonates underneath them. This ability makes it a highly effective weapon for disabling armoured formations. 

“For example, if a tank (a column of a squadron of tanks) is coming, you can just send it across in the path of the tank, under the belly of the tank, and it can blast. This is going to create a big defensive aspect in the enemy’s area of response (AOR).”

With Economic Explosives Limited (EEL) partnering for its production, MRMS is set to become a crucial part of India’s defence arsenal.

Upcoming Innovations 

It doesn’t just stop here. Major Rajprasad is already working on new AI-driven combat systems to further modernise the Indian Army. 

One of his key projects is an AI-enabled mine detection system that aims to reduce the risks associated with traditional demining methods. He is also developing Agniastra, a multi-target portable remote detonation system capable of neutralising targets from five to ten kilometres away. These innovations indicate that India is not just catching up with global military technology but setting new benchmarks for autonomous combat systems.  

Moreover, the Indian Army also announced recently that it is set to retire 4,000 mules that have served in remote and mountainous regions and replace them with AI-powered robotic dogs. 

New Kids on the Block.

Jai Hind pic.twitter.com/PyNlzNmpDp

— Brigadier Hardeep Singh Sohi,Shaurya Chakra (R) (@Hardisohi) January 9, 2025

As displayed in the parade for 77th Army Day in Pune at the Southern Command Investiture Ceremony 2025, India is the second nation to feature this technology after China.

These robotic dogs are designed to replace mules in high-altitude warfare. These robotic quadrupeds can navigate challenging terrain while carrying payloads equipped with thermal cameras and 360-degree sensors. 

They can carry payloads of up to 12–15 kilograms and operate in extreme temperatures ranging from -40 to 55 degrees Celsius.

Globally, militaries in the US, China, and Russia are investing in robotic warfare, and India is following suit. The transition to robotic logistics reflects the growing importance of automation and AI in military operations.  

What’s Next? 

At the end of last year, the Indian Army collaborated with BEL to launch the Indian Army AI Incubation Centre (IAAIIC) in Bengaluru. Army chief Dwivedi virtually led the launch, underscoring the Army’s commitment to AI for operational excellence.

In just six months, systems like Vidyut Rakshak, Agniastra, and Xploder have moved from development to deployment, reinforcing India’s commitment to self-reliance. His previous development, the wireless electronic detonation system, has already been integrated, proving the Army’s commitment to rapidly absorbing indigenous solutions.

For the first time, the Transfer of Technology (ToT) has also been transferred to private defence manufacturers through the Army Design Bureau, fostering large-scale production and strengthening India’s defence ecosystem. 

Recognised by top leadership, this milestone reflects the Army’s dedication to technological evolution. As the ‘Year of Technology Absorption’ progresses, this seamless transition from innovation to induction is setting a new standard for India’s defence modernisation.

With the direction of displays this year, the coming years could see the mass deployment of smart, unmanned combat systems, from autonomous reconnaissance vehicles to AI-driven missile defence networks. By placing a strong emphasis on AI, automation, and indigenous production, the Indian Army is ensuring that it remains prepared for future conflicts.

India’s premier defence research organisation, Defence Research and Development Organisation (DRDO) is making a powerful statement at Aero India 2025 with a showcase of indigenously developed cutting-edge technologies and systems. 

At the heart of the display is the full-scale model of India’s first 5.5 Gen stealth aircraft, the Advanced Medium Combat Aircraft (AMCA), which symbolises the country’s strides in advanced aviation technology. 

The India Pavilion, a testament to the Make-in-India initiative, brings together innovations from private industries, Defence Public Sector Undertakings (DPSUs), and start-ups. It displays over 330 products across 14 technology zones.  

DRDO’s exhibit features state-of-the-art fighter aircraft models, advanced missile systems, and naval warfare technologies. The key highlights include the Twin Engine Deck-Based Fighter (TEDBF), the LCA-Mk2, the Kaveri Derivative Aero Engine, and the Naval Anti-Ship Missile-Medium Range (NASM-MR). 

In addition to its exhibition, DRDO is hosting a seminar titled ‘DRDO Industry Synergy towards Viksit Bharat: Make in India – Make for World’ to promote self-reliance and boost defence exports. 

Inauguration by Defence Minister

Aero India 2025, Asia’s largest air show, commenced on February 10 at the Air Force Station in Yelahanka, Bengaluru. The show focuses on technological advancements in the aerospace and defence sectors. 

The biennial event, organised by the Defence Exhibition Organisation under the defence ministry, brought together global aerospace leaders, defence strategists, and government officials. 

This year’s event is being held under the theme ‘The Runway to a Billion Opportunities’, which underscores India’s ambitions in aerospace and defence innovation. 

It was inaugurated by defence minister Rajnath Singh, who highlighted India’s rapid advancements in defence technology, its growing industrial capabilities, and its vision for international collaboration. 

In his opening remarks, Singh emphasised that Aero India 2025 is not just a platform for showcasing technological innovation but also a bridge for strengthening global partnerships. 

“We often interact as buyers and sellers, where our relations are at a transactional level. However, at another level, we forge our partnership beyond the buyer-seller relationship to the level of industrial collaboration,” Singh added, stressing security and stability.

Speaking at the Inaugural Ceremony of #AeroIndia 2025 in Bengaluru. https://t.co/jJgSO5zu3a

— Rajnath Singh (@rajnathsingh) February 10, 2025

He declared that 2025 will be the ‘Year of Reforms’ for the Indian defence, emphasising that reforms will not only be limited to the government level but will involve active participation from the armed forces, defence PSUs, and private industry.  

Moreover, Singh highlighted India’s growing role in global defence and urged long-term industrial collaborations beyond buyer-seller ties. He cited the Tata-Airbus C-295 aircraft project as a model for future cooperation. 

He highlighted India’s commitment to defence exports and indigenous production and noted the sector’s rapid growth. Notably, defence production is expected to exceed ₹1.60 lakh crore and exports ₹30,000 crore by 2025-26. With ₹6.81 lakh crore allocated in the Union Budget, India is emerging as a global hub for aerospace manufacturing.

AI in the Exhibitions

This year’s Aero India exhibition was packed with high-tech displays and live demonstrations, offering a glimpse into India’s evolving defence capabilities. The exhibition runs from February 10 to 14, with the first three days dedicated to business interactions and the final two days open to the general public. 

A key attraction at the air show is the MBC2 Swarm Drone System, an AI-powered drone swarming capability that represents India’s growing expertise in autonomous aerial combat. 

The event also features an AI-powered mission planning and debriefing system, which uses real-time data analytics to enhance combat strategy and operational effectiveness. 

Bharat Electronics Limited (BEL) has showcased quantum cryptography, 5G defence solutions, unmanned warfare technology, space situational awareness systems, and theatre command systems. 

Advanced communication technologies such as the Ku Band Exciter, direct RF signal processing, and Digital Light Engine (DLE) are also on display. AI-driven innovations include generative AI-powered virtual assistants, AI-based language translation tools, and speech analysis systems.  

The AI voice command system introduced at the event aims to improve operational efficiency and pilot decision-making by integrating advanced automation with aircraft controls. This initiative aligns with India’s push towards self-reliance in defence technology and innovation.  

India Aims for Self-Sufficiency

Aero India 2025 is setting the stage for India’s technological leap in defence and aerospace. The showcase focuses on India’s Aatmanirbhar Bharat vision, which aims to reduce dependency on foreign technology while enhancing force multipliers for tri-service operations. 

The event also highlights India’s growing defence electronics and radar technology. A major focus is on Gallium Nitride (GaN) semiconductor solutions, which are key to the development of next-generation radars and electronic warfare systems. 

Moreover, the D4 Radar Anti-Drone System, designed to counter emerging UAV threats, is generating significant interest among international defence buyers.  

The exhibition featured aerobatic displays by the Indian Air Force (IAF) and showcased cutting-edge technologies, including developments from Indian start-ups at the iDEX pavilion.  

In his inaugural speech, Singh cited the development of high-tech products such as the Astra missile, the New Generation Akash missile, and autonomous underwater vehicles as examples of India’s growing capabilities.  

पिछले Aero India से लेकर अब तक, यानि सिर्फ 2 सालों में, हमने अनेक उपलब्धियाँ हासिल की हैं। कई High Technology Products जैसे, Astra Missile, New Generation Akash Missile, Autonomous Underwater Vehicle, Unmanned Surface Vessel, Pinaka Guided Rocket, जैसे कई Equipment भारत में… pic.twitter.com/Q4Juz2l6Km

— Aero India (@AeroIndiashow) February 10, 2025

There has been a notable shift towards fully indigenous unmanned aerial vehicles (UAVs), with manufacturers integrating advanced AI to enhance surveillance, efficiency, and navigation in challenging conditions. 

This movement aligns with the government’s initiative to eliminate Chinese components from defence equipment. For instance, Delhi-based startup Enord showcased its Inspector Lite defence variant, a surveillance drone entirely free of Chinese parts. 

This 4.8-kg carbon fibre UAV features ‘Ease Link’ for operations beyond visual line of sight, a ‘Surround Sense’ detect-and-avoid system, onboard AI processing, real-time crowd detection, and swarm communication capabilities. 

Similarly, drone firm IdeaForge unveiled the NETRA 5, its latest surveillance drone equipped with dual payload systems. It uses AI-powered analytics to track people and objects and has GNS-denied operations, which allow it to return home even if jammed.

Space-based Defence Applications

The event also underscores India’s growing strength in space-based defence applications. The Vikram 1 space launch vehicle signals progress in the private space sector, while the Garuda Mission’s Miniaturised Multi-Payload Satellite advances tactical reconnaissance. 

GalaxEye, a Bengaluru-based aerospace startup, showcased ‘Drishti Mission’, the world’s first multi-sensor SAR + MSI Earth observation satellite. The satellite delivers high-resolution all-weather imaging and is equipped with a synthetic aperture radar (SAR) sensor and a multispectral imaging (MSI) sensor. 

Alongside them, Pixxel showcased its Firefly constellation, demonstrating hyperspectral imaging for defence, agriculture, and environmental monitoring. On January 15 this year, Pixxel also launched the first three satellites of this Firefly constellation aboard SpaceX’s Transporter-12 mission. The constellation offers the world’s highest-resolution hyperspectral imaging.

Aero India 2025 reinforces India’s leadership in next-generation defence technology, fostering global collaboration and indigenous innovation. Other key events include the Defence Ministers’ Conclave, the CEOs Roundtable, and the India and iDEX Pavilions, which highlight India’s growing defence ecosystem. 

The event, which strongly focuses on AI, automation, and space-based defence, accelerates India’s path to technological self-reliance. As it progresses, defence experts and policymakers see India strengthening global partnerships and advancing its role in aerospace innovation for a secure future.

India’s drone industry is awaiting a revolution with the potential to transform sectors like agriculture, infrastructure, and security. However, regulatory hurdles and slower approval processes continue to keep this industry grounded. 

In an insightful conversation with AIM, Skylark Drones co-founder and CEO Mughilan Thiru Ramasamy gave first-hand insights into the impact of these delays on innovation and business growth. 

Drones could revolutionise infrastructure monitoring, agriculture, law enforcement, and disaster response. However, he revealed that the company still doesn’t have permission to fly drones in some regions of Bengaluru.

As of September last year, 10,208 type-certified commercial drones have been registered under the Digital Sky Platform, a digital system for managing drone operations in India, as per MoS civil aviation, Murlidhar Mohol, in a recent Rajya Sabha Q&A session. 

The Directorate General of Civil Aviation (DGCA) has issued 96 type certificates for different drone models based on their purpose. Of these, 65 models are designed for agricultural applications, while 31 are focused on logistics and surveillance. 

These figures highlight the growing adoption of drone technology, particularly in agriculture, where drones are increasingly used for crop spraying, monitoring, and yield assessment.  

Regulatory Roadblocks

Despite a series of policy reforms aimed at streamlining drone operations, challenges in obtaining clearances and navigating airspace restrictions have created bottlenecks that are slowing down innovation and adoption.

“To fly a drone in a city, you need approval from multiple agencies – HAL airport, CISF, the Commissioner’s office, and so many others,” Ramasamy said. Despite government initiatives, getting approvals for drone operations remains an uphill battle. 

One of the primary regulatory challenges the industry faces is restricted airspace access. Under The Drone Rules 2021, India’s airspace is divided into three categories: red, yellow, and green zones. While 86% of the country’s airspace falls under the green zone, where drone operations do not require special permissions, the remaining areas are heavily regulated. 

Red zones, totalling approximately 9,969, require special approvals from the civil aviation ministry and the concerned zone authorities before any operations can take place. Yellow zones, typically located around airports, require permission from air traffic control (ATC) before drone operations can commence. 

This zoning system, while essential for safety, has created delays in obtaining necessary approvals, especially in urban areas where drone-based services like e-commerce deliveries, medical supply transport, and infrastructure monitoring could be transformative.  

The biggest challenge is that there is no central platform where one can apply for permission. “Everything still runs on pen and paper, or at best, email, which is just digital paper,” Ramasamy explained. 

Bodhisattwa Sanghapriya, founder and CEO of IG Drones, told AIM that while the government has made progress in easing compliance, faster clearances for trusted domestic players will further accelerate industry growth. 

By prioritising reliable drone manufacturers and solution providers, India can strengthen national security while enhancing the country’s capabilities in surveillance, infrastructure monitoring, and disaster response.

The regulatory landscape for drones in India has improved significantly, with the government actively streamlining approval processes and promoting indigenous technology. 

“Although some operational challenges remain, particularly in securing approvals for sensitive zones such as defence areas and no-drone zones, the regulatory mechanism is much more streamlined than before,” Sanghapriya added.

He further said that compared to previous years, regulatory delays have been reduced, particularly for startups manufacturing 100% made-in-India drones with no Chinese components. This aligns with the government’s vision for Atmanirbhar Bharat and its push to make India a global drone hub by 2030.    

Supply vs Demand: The Real Issue

The regulatory delays don’t just affect drone startups; they impact enterprises, government projects, and the broader ecosystem. Ramasamy pointed out that while India has focused on incentivising drone manufacturing, real growth will only happen when demand is created. 

“More than subsidies, the government needs to create real use cases that push adoption,” he added. Until then, navigating the regulatory maze will remain one of the biggest roadblocks to India’s drone revolution.

Even though the Production Linked Incentive (PLI) Scheme for drone and drone components did not see any allocation in the recent Union Budget 2025, the government has prioritised funding for the space tech industry as a whole.

Notably, the government has allocated ₹676.85 crore to the Namo Drone Didi program as part of its Central Sector Schemes. Regardless, the industry has yet to take centre stage in the Budget.

While China’s DJI dominates the global drone market with fully integrated unmanned aerial vehicle (UAV) systems, India continues to struggle with roadblocks despite both countries having started on similar grounds for innovation.

What is the Government Doing?

The government has taken several steps to ease the regulatory burden on drone operators. More recently, in August 2024, the government amended The Drone Rules to simplify the registration process by removing the requirement for a passport. 

“Now, a government-issued proof of identity and address, i.e. Voter ID, Ration Card or Driving License, can now be accepted for registration and de-registration or transfer of drones,” Mohol explained.

Despite these improvements, policy bottlenecks remain a concern. For instance, drone-based delivery services, which have the potential to improve healthcare access in remote areas, face operational delays due to lengthy bureaucratic approvals. 

Similarly, drone surveying and mapping in the infrastructure sector require clearances from multiple authorities, leading to project slowdowns.  

As per Mohol, the government claims to be working towards addressing these challenges. One significant safety measure implemented is the requirement for all certified drones to have a tamper-avoidance mechanism that protects both the firmware and hardware from unauthorised access. This ensures that drones used in critical sectors remain secure and resistant to hacking.

However, for India to fully harness the benefits of drone technology, further reforms are needed. The Digital Sky platform must be enhanced to enable real-time digital approvals for operations in restricted zones. 

Additionally, expanding financial incentives and promoting drone adoption in sectors beyond agriculture will be key to unlocking new opportunities. 

TakeMe2Space, a Hyderabad-based space-tech startup, is aiming to make space more accessible by launching India’s first AI-driven space laboratory. Founded by Ronak Kumar Samantray, the company is working to change the way people interact with satellites. 

Unlike traditional models where satellite access is restricted to governments, defence agencies, or elite research institutions, TakeMe2Space wants to democratise space, offering real-time access to satellites for students, researchers, and businesses alike.

“Our goal is to ensure that everybody’s ideas can be taken to space,” Samantray told AIM in an exclusive interview. “You don’t have to be in NASA, ISRO, or an IIT to run an experiment in space. Sitting in Kerala, Delhi, or even Antarctica, you should be able to operate a satellite.”

The company recently conducted a technology demonstration mission with ISRO, proving the viability of its approach. Now, the next step is launching two fully operational satellites this year, with a long-term ambition to build the future of computing in orbit.

Samantray (second from the left), along with former chairman of ISRO, S. Somanath

As of last year, the Indian space economy was valued at approximately $8.4 billion, constituting a 2% share of the global space market. The country currently operates 56 active space assets, including 19 communication satellites, nine navigation satellites, four scientific satellites, and 24 earth observation satellites, as per the economic survey 2024-25. 

With the government aiming to scale the space economy to £44 billion by 2033, inclusive of £11 billion in exports, which would represent 7-8% of the global share, TakeMe2Space believes that accessing space should be as simple as logging into a cloud computing service.  

Space Can be Hands-On for the Next Generation

Samantray’s motivation for TakeMe2Space comes from his background in computer science. Growing up, he had easy access to computers, which nurtured his love for coding. However, he observed that space has remained largely inaccessible to young minds. 

“If you’re interested in space, the most you can do today is read a research paper or maybe play with an electronics kit,” he explained. “Nobody gets to task their own satellite.”

TakeMe2Space aims to bridge this gap by offering an AI-powered satellite lab. Schools and universities can subscribe, allowing students to log in remotely, upload code in Python or C++, and interact with a real satellite. 

“Just like how schools have computer labs, electronics labs, and robotics labs, we believe there should be a satellite lab,” said Samantray. “Our satellites will be openly accessible for students to run their personal experiments.”

Samantray (left) at the Sriharikota launchpad.

So far, the education sector has shown interest, but surprisingly, most early adopters are not universities. Out of 20 customers who have signed up, only four are from the education sector, while the remaining 16 are from GIS (geographic information systems) and data analytics companies.

From a business point of view, the company provides “for ₹20,000 in the pricing, 90 minutes of the satellite time in orbit.”

TakeMe2Space payload on board the ISRO SpaDeX Mission

AI in Space is More Than Just Data Collection

The integration of AI in TakeMe2Space’s model is a key differentiator. Traditionally, satellites capture raw data, which is then processed on Earth. But AI-driven satellites can process images in orbit, making decisions on what data to collect and download.

One experiment conducted on TakeMe2Space’s AI lab by the University of Southampton involved using a low-power AI algorithm to reduce motion blur in satellite images. “A satellite moves at 7 km per second, so capturing a clear image is a challenge,” said Samantray. “Instead of using traditional pointing and staring techniques, AI can remove motion blur in real-time.”

Samantray and the team working on the payload at TakeMe2Space.

AI also allows for real-time object detection and change detection. This means satellites can prioritise what images to capture and transmit, reducing unnecessary data transmission and saving bandwidth. 

“Our aim is not just to provide satellite data,” Samantray emphasised. “We want to give users control of the satellite itself.”

Security and Ethical Concerns

With TakeMe2Space offering satellite access to a broader audience, concerns about data security and ethical usage naturally arise. 

Allowing individuals and businesses to task satellites in real time raises questions about privacy, misuse, and cybersecurity risks. Samantray acknowledged these challenges and detailed the safeguards the company has implemented.  

“We are enabling people to control a satellite, which means we have to be two steps ahead in terms of security,” he said. “Our system is designed to preemptively stop any harmful actions before they occur, rather than reacting after the fact.”  

To prevent unauthorised activities, TakeMe2Space does not equip its satellites with propulsion systems, ensuring they cannot be hijacked and redirected toward other objects.

Additionally, the company has capped the resolution of its satellite imagery at no finer than 5 meters per pixel, preventing privacy violations. “Even if something goes wrong, no one can use our satellite for surveillance or for interfering with other space objects,” Samantray assured.  

On the data front, TakeMe2Space follows strict encryption protocols. Customers retain ownership of the data they generate, and the company does not store or claim rights over it. “We are like an infrastructure provider, similar to how AWS doesn’t own the applications running on its servers,” he explained.   

Building the Future of Space Computing in India

As reiterated by the founder, TakeMe2Space does not intend to compete with conventional Earth observation firms. Rather, it envisions a future in which computing transitions to space. 

“We’re not here to be another Earth observation company,” said Samantray. “We want to build data centres in orbit where AI and computing happen in space, not on Earth.”

By shifting heavy computation tasks to satellites, TakeMe2Space aims to reduce Earth’s power consumption. The world’s increasing reliance on AI, data storage, and cloud computing is driving exponential energy demand. 

Running AI models in space, where temperatures are extremely cold and heat dissipation is more efficient, could be a long-term solution.

“Space gives you a very controlled and predictable temperature environment, and whatever heat you generate up there has no impact on Earth’s atmosphere. The absolute temperature of any point in space is 4 Kelvin, so as much heat as you generate, it absorbs the heat, which will just be a point of heat for space.”

Looking ahead, TakeMe2Space hopes to scale its model, expanding beyond AI labs to full-fledged space computing infrastructure. The company is not reliant on government funding but sees the private sector as its primary market. “We’re building for private businesses, not just defence or government customers,” Samantray clarified.

If it succeeds, the startup may redefine global interactions with satellites, making space an accessible laboratory for everyone.

While many companies are caught up in the AI hype cycle, ABB, an industrial robot supplier and manufacturer, has been building and implementing practical AI solutions for nearly a decade. 

In an interview with AIM, Sami Atiya, president of the robotics and discrete automation at ABB, expressed how the company has taken a measured, value-driven approach to AI innovation, which is delivering results across multiple industries.

“We at ABB had our first research done in AI more than a decade ago, in 2014. It’s already implemented in many of the systems we use today,” noted Atiya. This long-term perspective has helped ABB distinguish between AI hype and genuine technological maturity.

This, according to him, is a critical approach considering the cycles of inflated expectations and subsequent “AI winters” that have shaped technological development over the past few years.

Different Approach to AI Implementation

Rather than creating centralised AI teams or pursuing grand projects, ABB has adopted a distributed, customer-centric approach. “What we learned is we don’t drive technology from the top of central needs. We drive it from customer needs,” Atiya explained. 

The company maintains an AI Council that coordinates activities, manages an AI repository, and oversees education initiatives while allowing individual teams to develop solutions based on specific customer requirements.

This approach has allowed ABB to categorise and track projects across the company, distinguishing between implemented solutions, pipeline developments, and exploratory ideas. This method, Atiya said, not only ensures that promising concepts are nurtured but also avoids the pitfall of investing in ideas that may not materialise. 

Over the last decade, ABB has expanded its AI portfolio to include over 250 projects, many of which are already delivering tangible results. “Most of these projects here are available for purchase today,” Atiya said.

Real-World AI Applications

One of ABB’s most impressive achievements is in robotic vision and navigation. The company has developed AI systems that allow robots to recognise and handle objects they’ve never encountered before. “What our research has done is that we now have a neural network that can recognise the shape of the object that it has not seen before,” explained Atiya.

Another groundbreaking implementation is in factory navigation. Using the Visual SLAM navigation technology, powered by AI and 3D visual detection, robots can now navigate complex factory environments without requiring physical guides or markers. 

“The robot actually goes around, figures out where it is, and then starts creating a map… You put another robot in, they talk to each other, and they learn,” Atiya described this advancement.

AI’s Role in Sustainability and Workforce Evolution

Sustainability is a cornerstone of ABB’s AI strategy. This was highlighted during a panel discussion led by Sara Larsson, CEO at the Swedish Chamber of Commerce India, featuring leading AI experts like Khushaal Popli, program director, IIT Bombay; Kishan Sreenath, VP, Powertrain, VolvoGroup; and Kaushik Dey, head of research, Ericsson. 

Panel discussion at ABB, Bengaluru campus. (From left to right) Sara Larsson, Kaushik Dey, Kishan Sreenath, Khushaal Popli, Sami Atiya, and Subrata Karmakar.

AI-powered solutions like building analysers optimise energy consumption by integrating weather forecasts, operational data, and energy patterns. These efforts not only improve efficiency but also support global sustainability goals.

As industries evolve, so too must their workforces. ABB invests significantly in upskilling its employees by combining AI expertise with engineering knowledge. 

Atiya also shared insights into ABB’s hackathons and training programs, including a recent initiative in India that trained 2,000 employees on AI on the same day and generated over 200 new AI use cases. 

He explained this as a compact way of reinforcing and energising the teams. “It’s not just about hiring AI experts; it’s about expanding the capabilities of our existing teams,” he remarked.

ABB’s Strategic Upskilling and Recruitment

ABB’s leadership in AI extends beyond technological advancements to strategic talent acquisition and workforce development. With over 10,000 employees in India, ABB leverages the country’s exceptional talent pool across engineering and software domains. 

According to Atiya, ABB recruits top-notch professionals while maintaining a low attrition rate, owing to its strong reputation and focus on employee growth and education. “We like to keep our employees,” Atiya said.

However, the company’s strategy isn’t limited to external hiring; upskilling its existing workforce is a key priority. He emphasised the importance of blending AI expertise with engineering disciplines like mechatronics to foster innovation. 

This approach ensures ABB’s teams are equipped with both technical knowledge and domain-specific expertise, which is critical for solving industry challenges. “It’s not about hiring AI experts alone; it’s about expanding the capabilities of our own people,” Atiya highlighted. 

By cultivating multidisciplinary teams and prioritising lifelong learning, ABB is building a workforce ready to lead industrial transformation. This reaffirms its commitment to people as its greatest strength.

In addition, Atiya also emphasised at this year’s World Economic Forum in Davos, “Like robotics, AI will lead to new jobs and change the way we work. We must inspire innovation and emphasise the importance of learning and upskilling to realise its benefits.”

Synthetic Data and AI Limitations

ABB’s success is built on collaboration. To foster innovation, it works with startups, universities, and technology leaders. Partnerships like its acquisition of Sevensense for advanced robot navigation and ongoing collaborations with IIT Bombay are vital to scaling breakthroughs.

Atiya was candid about the challenges of AI, particularly the risks of bias and data misalignment. 

He stressed the importance of synthetic data in addressing the shortage of real-world training data but warned of the risks of amplifying existing biases if quality controls are inadequate. 

He also acknowledged that while generative AI and LLMs have potential, they face limitations. 

The Future of Human-Machine Collaboration

Atiya sees natural language interaction as the next frontier for human-machine collaboration. ABB is pioneering systems that enable robots to understand complex verbal commands, such as arranging objects based on human instructions. 

“In the past, we had to learn the language of machines. In the future, machines will learn ours,” he noted. This focus on human-centric AI aligns with ABB’s broader mission of enhancing human capabilities, not replacing them.

India’s space industry is poised for a major boost with the upcoming Union Budget. The success of Chandrayaan-3, which made India the fourth country to land on the moon, and the rise of private space startups have charged the sector. 

With ISRO’s ambitious roadmap and increasing global interest in India’s cost-effective space solutions, this Budget could be a defining moment for the sector. 

In the previous Budget, finance minister Nirmala Sitharaman announced an impressive allocation of INR 1,000 crore, giving the space technology a boost. “[Something like] this will certainly help space-tech companies looking for the much-needed early-stage capital to get started,” Anil Joshi, managing partner at Unicorn India Ventures, said. 

Manoj Agarwal, managing partner at Seafund, said, “As a deep tech-focused VC fund, the FM announcing Rs 1,000 crore space economy VC fund and R&D fund of Rs 1 lakh crore will work as a strong catalyst for startups in deep tech and space tech.” 

Over the Past Year…

India has made major progress in its space dreams over the past year. As of last year, the Indian space economy was valued at approximately $8.4 billion, constituting a 2% share of the global space market. The government envisioned scaling the space economy to $44 billion by 2033, including $11 billion in exports amounting to 7-8% of the global share. 

India currently operates 56 active space assets, including 19 communication satellites, nine navigation satellites, four scientific satellites, and 24 earth observation satellites. Recently, it launched the GSAT-20 satellite in collaboration with SpaceX. 

The Cabinet also approved the Gaganyaan follow-on mission, which will pave the way for the establishment of the first module of the Bhartiya Antariksh Station; the Chandrayaan-4 Lunar Sample Return Mission; the Venus Orbiter Mission; and the development of the Next Generation Launch Vehicle. 

At the AWS Summit, Clint Crosier, the director of the AWS Aerospace and Satellite business, called India the next space technology hub. He expressed that AWS sees India as a significant growth market and plans to invest 12.7 billion in cloud infrastructure in India by 2030.

Amidst this, a number of Indian space startups took off, quite literally. These covered a wide range of industries, including Earth observation applications (Pixxel), space-based data analytics (Bellatrix Aerospace), satellite manufacturing (Agnikul Cosmos), and launch vehicle development (Skyroot Aerospace).

The Indian Space Research Organisation (ISRO) saw the appointment of V Narayanan as the new chairman of the organisation and secretary of the Department of Space. He succeeded S Somanath, who retired after a stellar tenure. 

ISRO also announced the successful completion of its SpaDeX (Space Docking Experiment) mission, launched on December 30, 2024, from the Satish Dhawan Space Centre in Andhra Pradesh’s Sriharikota. This made India the fourth in the world to achieve space docking alongside the United States, Russia, and China.

This is the same launch pad at which ISRO just completed its 100th launch of the GSLV-F15 / NVS-02 Mission. 

#100thLaunch:
Congratulations @isro for achieving the landmark milestone of #100thLaunch from #Sriharikota.
It’s a privilege to be associated with the Department of Space at the historic moment of this record feat.
Team #ISRO, you have once again made India proud with… pic.twitter.com/lZp1eV4mmL

— Dr Jitendra Singh (@DrJitendraSingh) January 29, 2025

Under the SpaDeX mission, many Indian space startups launched payloads and took charge of leading India’s space mission. These included experiments from Mumbai’s Manastu Space Technologies Private Limited, Bengaluru’s Bellatrix Aerospace Pvt Ltd and GalaxEye Space Solutions Private Limited, Andhra Pradesh’s N Space Tech, Hyderabad’s TakeMe2Space, and Ahmedabad’s PierSight Space.

Additionally, on January 15 this year, Pixxel, a Bengaluru-based aerospace startup, launched the first three satellites of its Firefly constellation. These hyperspectral satellites, integrated via Exolaunch and launched aboard SpaceX’s Transporter-12 mission, offer the world’s highest-resolution hyperspectral imaging. 

This breakthrough enhances climate monitoring, resource management, and environmental analysis with unprecedented precision.

Here’s AIM’s previous interview with Pixxel:

A Promising Future

Yashas Karanam, co-founder & COO of Bellatrix Aerospace expressed hopes for a PLI scheme to incentivise space tech companies and optimise expenses. He also emphasises the need for government contracts. 

“Can industries actually spearhead the whole thing and make the entire constellation themselves? It could be a civilian satellite or a different satellite constellation. These kinds of individual budgets are going to really start companies to think about investing in these sectors,” he told AIM.

Another aspect he predicted might arise is the government becoming a customer for some of the products. This sentiment also resonated with Ankit Anand, founding partner at Riceberg Ventures (which invests in deep tech). He told AIM, “If the government becomes a customer, then every investor will know that this startup is able to really sell this thing at a scale.”

Gaurav Seth, co-founder & CEO at PierSight, highlighted to AIM the need for enhanced tax credits and funding to drive innovation, attract investment, and position India as a global leader in space exploration and satellite technology.

“Currently, companies can claim deductions for R&D under Section 35(2AB) of the Income Tax Act, but a higher deduction (e.g., 150%-200%) should be allowed for space R&D spending to incentivise long-term innovation,” he says.

Ronak Kumar Samantray, founder of TakeMe2Space, is confident that government support for the space sector is not just expected—it’s inevitable. 

Reflecting on India’s space policy, he believes it is among the best in the world, allowing private companies to hire talent from across the globe, unlike restrictive policies in countries like the US.

“For me, what’s exciting about the Budget is to figure out that new thing that the government decides to do right,” Samantray told AIM, highlighting his company’s belief that ‘space is for everyone’.

Samantray highlighted that India’s Make in India initiative played a crucial role in enabling space tech advancements. Without the earlier push for manufacturing, sectors like precision engineering and satellite production wouldn’t have the skilled workforce needed today. 

For India’s space tech sector, the Budget isn’t just about numbers. It’s about the direction the government sets, and if the past is any indication, space will continue to receive strong momentum, he believes.

Not Just Satellites But Drones as Well

Looking at learning from the past, Mughilan Thiru Ramasamy, co-founder and CEO at Skylark Drones, a startup shaping India’s UAV (Unmanned Aerial Vehicle) ecosystem, shared his insights into the advancement of the drone industry in the upcoming Budget.

With the rapid advancements in aerospace and semiconductors, he believes that drones will see increased Budget allocations. “I think the Drone Didi program will get some budget because they will try to create employment,” he told AIM in an interview. 

According to Mughilan, one key area of focus is real-time governance. He points to Telangana’s proactive approach, where the state is already integrating drones into administrative operations. 

However, he emphasises that beyond just funding drone technology, the government should focus on demand creation rather than just supply-side incentives. A strategic push to increase industry adoption of drones, whether in agriculture, infrastructure, or surveillance, will drive innovation, job creation, and industry growth.

Ankit Mehta, CEO of ideaForge Technology Limited, expressed particular optimism about the potential launch of a Production-Linked Incentive (PLI) Scheme 2.0 for drones. 

“While the reported ₹500 crore outlay is expected to extend beyond manufacturing to include services like drone leasing, Indigenous software development, and counter-drone systems, given the potential of the technology and the industry, we need a much larger scheme amounting to ₹1,000-2,000 crore to unlock this opportunity over at least five years,” he said.

Beyond PLI 2.0, he also stressed the need for a dedicated R&D fund, like Seth, to drive innovation, technological advancements, product development, and exports. 

“This Budget has the potential to cement India’s position as a global leader in drone technology, driving long-term growth, creating high-value jobs, and ensuring technological sovereignty,” Mehta said. 

For the drone sector, the upcoming Budget isn’t just about subsidies or schemes, it’s about the larger vision. A strong emphasis on demand-driven policies could position India as a global leader in drone technology while fostering sustainable economic growth.

As India positions itself as a global hub for semiconductor manufacturing, all eyes are on the Union Budget 2025. Discussions across all industries in India have intensified, with the semiconductor sector being no exception. Following significant allocations to key technology missions in the previous Budget, the semiconductor industry anticipates its moment in the spotlight this year.  

Over the past year, India’s ambition to be a global semiconductor hub has gained momentum, particularly with the government’s Production Linked Incentive (PLI) schemes and investments in R&D. These efforts aim to reduce reliance on imports and foster a robust domestic semiconductor ecosystem, aligning with global supply chain resilience trends.  

Many industry leaders have voiced their expectations, focusing on incentives for setting up fabs, expanding talent pools, and addressing critical gaps in semiconductor manufacturing infrastructure.  

The sector is also looking forward to measures that will ensure strategic partnerships with international players, enable indigenous chip design innovation, and provide tax breaks to stimulate private investment.  

As the government unveils its vision in the upcoming Budget, the semiconductor industry could play a defining role in advancing India’s goals of self-reliance and economic growth.  

Semiconductors in Last Year’s Budget

The Union Budget 2024 introduced pivotal measures for the semiconductor sector. To develop the semiconductor and display manufacturing ecosystem, a significant allocation of INR 6,903 crore – more than double the previous year’s allocation of INR 3,000 crore – was announced.  

Key provisions included 50% fiscal support for setting up semiconductor and display fabs, as well as support for compound semiconductors, silicon photonics, sensors fabs, and ATMP (assembly, testing, marking, and packing) and OSAT (outsourced semiconductor assembly and test) facilities. 

These measures aimed to strengthen India’s semiconductor supply chain and reduce reliance on imports. 

On the contrary, there have been previous conversations about the Budget bar being too low. In an interview with AIM last year, V Ramgopal Rao, group vice-chancellor of BITS Pilani Campuses, said, “The next government looks at the last Budget and actual utilisation and adds some 5% to that, but the base is already very low.”

Additionally, due to geopolitical shifts and US sanctions, India must urgently secure strategic autonomy by developing its own semiconductor IP and products. 

Ajai Chowdhry, co-founder of HCL and chairman of the National Quantum Mission, emphasised that by designing indigenous chips, the country can safeguard against future global trade restrictions and technological sanctions. 

With most chips still imported, the government must prioritise Indian-made high-quality chips for the nation. “We suggested the government provide a list of 30 chips and 30 priority products that should be developed and manufactured in India.” 

The EPIC Foundation has proposed an INR 44,000 crore allocation in the Budget, with INR 15,000 crore earmarked for system products and INR 11,000 crore for semiconductor products. Moreover, the central and state governments have allocated INR 90,000 crore for capital expenditure. This highlights India’s growing commitment to semiconductor self-sufficiency.

“We are already establishing five semiconductor plants across the nation, with more planned. It is our request to the government, ministry, as well as the finance minister to look at the proposal very critically as this has become much more urgent and important due to the new regulations coming in from the US,” Chowdhry stated.  

Key Recommendations From IESA This Year

As India continues its semiconductor and manufacturing journey, industry leaders like the India Electronics and Semiconductor Association (IESA) have shared crucial recommendations for the Union Budget 2025-26. 

Ashok Chandak, president of IESA, highlighted the importance of expanding existing initiatives and introducing targeted measures to ensure long-term sustainability and competitiveness.  

“The Semicon India Program and ISM have delivered significant contributions to GDP growth, job creation, foreign investments, industrial self-reliance, and bolstering India’s position in the global semiconductor market,” Chandak emphasised.  

The IESA’s proposal includes extending the PLI scheme with an additional $20 billion over five years, supplementing the existing INR 76,000 crore. This would support the growth and innovations of industry projects and Aatmanirbhar Bharat Abhiyan along with the Viksit Bharat 2047 initiative.

Chandak has proposed a stricter PLI framework is recommended, ensuring 25% local value addition by 2025-26 and 30% by 2027. 

Moreover, $5 billion in incentives is proposed for the electronics components industry. To foster innovation, IESA advocates allocating INR 10,000 crore for industry-driven R&D through a PPP model.  

Role of Data Infrastructure 

As India accelerates its digital transformation across sectors like finance, retail, and education, the demand for advanced and scalable data infrastructure continues to grow. 

Sunil Gupta, co-founder and CEO of Yotta Data Services, underscores the critical role of data centres and AI technologies in supporting this evolution, particularly with initiatives like Digital India and the IndiaAI Mission gaining momentum.  

“Investments in sovereign infrastructure, including data centres and AI-driven technologies, will not only bolster the nation’s tech status but also attract substantial private-sector investment,” Gupta stated to AIM.  

He further highlighted the importance of the Union Budget prioritising measures such as advancements in GPU and semiconductor technologies. This focus, Gupta believes, will propel growth in data centres and AI industries and position India as a leader in the global digital economy.

Shrirang Deshpande, strategic program head at Vertiv India, said, “We anticipate measures supporting the rise of data centres as the Union Budget draws near, such as incentives for integrating green energy, simplified regulations for expanding infrastructure as well as initiatives to improve connectivity in Tier-2 and Tier-3 cities and generating employment opportunities.”

While also highlighting this, Chris Miller, the author of Chip War, identified talent and infrastructure as two key challenges in India’s path to progress in the chip space. 

As countries like the US and China forge ahead with advanced 3–5 nm chip production, India grapples with foundational challenges. 

According to Miller, the time needed to develop infrastructure is a key challenge, particularly for specialised materials, chemicals, and tools essential to semiconductor manufacturing. However, experts warn that funding alone won’t resolve long-standing technological and infrastructural gaps.  

While optimistic about progress, Miller also cautioned that achieving full-scale capacity could take a decade, though efforts to build the necessary infrastructure are already underway.

A few months ago, Indian Prime Minister Narendra Modi, while addressing the Indian diaspora at a community event in New York, offered a unique perspective on AI. While the world associates AI with Artificial Intelligence, PM Modi believes that AI also stands for ‘America and India’.

While he stressed the thriving partnership between the two countries, on January 13, the US sent shockwaves through the global tech industry when the then Joe Biden and Kamala Harris administration announced a regulatory framework for the responsible diffusion of advanced AI technology. 

The framework created distinct tiers of access. While nations like Germany, South Korea, Japan and 15 other allies have received unrestricted access to cutting-edge American AI chips, others like China, Russia, and North Korea faced a complete block. 

Notably, India found itself excluded from the privileged list of 18 allied countries granted unlimited access, instead being placed among the third-tier destinations requiring explicit licensing.

The new rules for chip production and development provide flexibility with two key allowances. Companies can import up to 1,700 GPUs, valued at around $40-50 million, without needing a licence. 

However, larger imports, worth up to $1 billion, will require a licence review. This approach makes sure that smaller imports are easier to access while maintaining stricter oversight for larger purchases.

What Happens to India Now?

While this raises questions about India-US relations, it could also impact the India Semiconductor Mission (ISM). This could create a complex new reality for India’s tech ambitions and boost its global presence, as countries like China have no access to this technology. 

The rule change triggered widespread international discussions as it updated controls for “advanced computing chips” and mandated authorisations for exports, re-exports, and in-country transfers involving a wider range of countries.

Ashok Chandak, president of the India Electronics and Semiconductor Association (IESA), said, “In the short term, the impact is expected to be minimal.” The long-term implications, however, deserve careful consideration.

Meanwhile, Ajai Chowdhry, who helped build one of India’s earliest tech success stories as the co-founder of HCL, sees this as a pivotal moment. 

Drawing parallels to India’s past, Chowdhry noted, “This brings us back to the old licensing regime.” “We faced similar export controls on space and atomic energy…and we then emerged out of that successfully, getting our brilliant engineers to create our own technologies.”

Chandak noted that large AI data centers, which need hundreds of thousands of GPUs, could face delays or reductions in scale, potentially giving global companies a competitive edge over Indian firms.

However, he also saw a silver lining. “Small-scale setups could still enable experimentation, innovation, and restricted model development.”

India Can Create Its Own NVIDIA

According to Chris Miller, the author of Chip War: The Fight for the World’s Most Critical Technology, NVIDIA is “by far the most important” company in the semiconductor industry. 

“I am sure most of the design of NVIDIA and AMD GPUs must have been done in India by Indian engineers,” Chowdhry said. This makes the current situation of US sanctions particularly interesting.

Recently, Miller praised India’s deep talent pool in chip design during an interview with AIM. 

India already has a promising path forward through its homegrown RISC-V technology, which was developed at IIT Madras. Unlike other chip technologies that require expensive licensing fees, RISC-V is open-source, which means that India can freely use and modify it to build its advanced chips.

“This is the new Unipolar world, where every country is on its own,” Chowdhry observed. 

To turn this challenge into an opportunity, he advocated for a practical approach: boost government funding for chip design through the ISM and make it accessible to companies of all sizes. 

“Maybe we can create our own NVIDIA and AMD in the next ten years!” he suggested. Notably, increased funding from ₹50 crore to ₹150 crore could help Indian companies, from established corporations to innovative startups, drive this transformation.

Moreover, in a recent post, NVIDIA strongly criticised this rule and argued that the regulation threatens to undermine US leadership in AI and stifle innovation worldwide.

India’s Current Semiconductor Landscape

India’s semiconductor landscape is undergoing significant transformation, marked by substantial investments, strategic initiatives, and emerging challenges. 

Global industry leaders are recognising India’s potential. The government’s commitment to fostering a robust semiconductor ecosystem is evident through the ISM. 

However, the industry continues to face challenges. Despite producing approximately 1.5 million engineering graduates annually, there are concerns about the specialised skills required for semiconductor design and manufacturing. 

Experts highlight the need for sustained investment in both technical and business talent to bridge this gap. Besides, India’s semiconductor industry has traditionally been ‘fabless’, with designs conceived domestically but manufactured overseas. 

This reliance on external fabrication poses security risks within the supply chain. Efforts are underway to establish domestic fabrication facilities, with companies like PSMC and Tata Electronics planning to build fabs in India by 2026. 

Hence, while India is making strides in the semiconductor sector through strategic investments and initiatives. 

Going Forward

Looking ahead, India might have some flexibility in accessing advanced chips through a programme called the National Validated End-User (NVEU). 

This is because India faces a unique situation. It doesn’t re-export high-end chips (like Compute ICs) or make advanced chips itself, but it does have major design centres for big companies like NVIDIA and AMD. 

This could make it easier for India to get approval for chip licences under this programme. 

The programme also sets limits on how many high-performance chips (like H-100 GPUs) India can receive each year. These limits will grow over time, with fewer than 1 lakh GPUs in 2025, increasing to 2.7 lakh units in 2026 and 3.2 lakh units by 2027.

This gradual increase allows for controlled access to advanced chips over the next few years.

India’s semiconductor aspirations have captured global attention with investments from companies and investors around the world. The country is setting ambitious goals to become a major player in the chip manufacturing landscape. However, one of the industry’s most influential voices has suggested that the road ahead may be “inevitably” longer than anticipated. 

In an exclusive interview with AIM, Chris Miller, the author of ‘Chip War: The Fight for the World’s Most Critical Technology’ said that India is in the early stages of building out its chip industry.

While Miller outlined India’s potential, saying, “India is now seeing more investment than ever in semiconductor manufacturing and design”, he also highlighted challenges. According to him, it will be an “inevitably decades-long process”.

Miller stressed the need to foster homegrown companies to create a robust domestic ecosystem. Drawing comparisons to industry leaders like Taiwan and South Korea, he said, “India is not going to go from an initial level to Taiwan’s level overnight…It took countries like Taiwan and Korea decades to build out their chip industry starting in the 1970s.”

Race with China, Taiwan, and the US

India’s vision of becoming a semiconductor powerhouse by 2047 aligns with its broader ‘Viksit Bharat’ mission. 

Miller advocated for strategic planning and consistent investment. “A single plant can take three or four years to build once you start construction, and there’s usually a couple of years of planning beforehand, so this industry is used to thinking in terms of decades,” he said. 

The global semiconductor race is defined by one name: Taiwan Semiconductor Manufacturing Company (TSMC). Producing 99% of the world’s AI accelerators, TSMC has become indispensable in powering the technological advancements of AI-driven industries. 

Regardless, Miller added, “India is arguably one of the world’s top countries in chip design talent, second only to the United States.” 

Chips now represent the largest flow of goods into China. This highlights their strategic importance in the geopolitical tug-of-war between the US and China. 

Every major AI system, from generative models like ChatGPT to advanced data centres, relies on TSMC’s cutting-edge chips. 

The stakes in the semiconductor race are immense. As Miller believes Moore’s Law, which predicts the doubling of transistors every two years, “is changing”, TSMC pioneers alternatives like 3D stacking and advanced packaging. These innovations enable continued improvements in AI chip performance and secure TSMC’s leadership.

While competitors like NVIDIA and Broadcom play vital roles in design, TSMC’s scale and expertise make its dominance clear. 

Leveraging Established Technologies  

On the production front, Miller advised India to start with established technologies rather than diving into cutting-edge innovations like 2-nanometre or 3-nanometre nodes. 

While countries like the US and China forge ahead with advanced 3–5 nm chip production, India finds itself grappling with foundational challenges. Despite renewed efforts and increased budgetary allocations, India’s semiconductor ambitions remain distant. 

Simultaneously, China’s reported breakthrough with 3 nm chips challenges the US-led sanctions that sought to stifle its progress. Facilities in India still grapple at mature nodes like 28 nm and 40 nm.

Encapsulating India’s predicament aptly, semiconductor analyst Arun Mampazhy said, “It’s crucial that we begin rather than engage in an endless debate over the best starting point. India really does not have much of a choice in this.” 

The Indian government has shown a commitment to the sector with the interim Budget’s ₹6,903 crore allocation, which is more than doubling the previous year’s amount. However, experts argue that funding alone cannot bridge decades of technological and infrastructural deficits.

Miller also pointed out that many nations, including European countries and Israel, are following this practical approach. “There’s a lot of innovation happening in older process technologies, especially as they’re being repurposed for applications like AI,” he noted.

Challenges in Chip Talent and Infrastructure  

Miller identified talent and infrastructure as the two major hurdles to India’s ambitions. While India has considerable expertise in chip design, expanding into manufacturing, testing, and packaging requires specialised skills across multiple disciplines. 

“It takes time to build this talent, with different educational backgrounds, internships, and work training,” Miller explained.

Infrastructure development is another critical area, particularly for materials, chemicals, and specialised tools required for semiconductor manufacturing. As India advances into semiconductor manufacturing, it requires the development of specialised infrastructure, including unique chemicals, materials, and tools. 

While Miller expressed optimism about the current pace of progress, he reiterated that building full-scale capacity “will likely take a decade”. “Progress in this area is already visible, with ongoing efforts to establish the necessary infrastructure,” he concluded.

India produces around 1.5 million engineering graduates annually, creating a robust foundation for technological innovation by consistently churning out high-quality talented professionals.

Renowned institutions like the Indian Institutes of Technology (IITs) and the National Institutes of Technology (NITs) are central to this ecosystem. As of now, the country’s semiconductor industry is in a transformative phase, driven by the skilled talent pool. However, things may not be as rosy as they appear. 

Although the country prides itself on the mass quantity and quality of its talent, experts are worried about the gaps in specialised skills that need attention. The talent base needs to be strengthened further to sync with the requirements of global tech giants. 

In an interview with AIM, Ankit Anand, founding partner at Riceberg Ventures, summed up the issue, saying, “The talent pool here is extremely limited even though IITs churn out around 10,000 engineers a year.”

Limited Talent Pool

To start with, there are very few researchers and scientists in India, particularly in advanced fields like molecular biology, quantum computing, and AI. Besides, the number of PhDs and specialised scientists remains alarmingly low, added Anand. 

This disparity is compounded by India’s historical focus on an elitist education model, which emphasises exclusivity and limits the scale of institutions to produce broader pools of talent. 

Adding to this issue is the lack of financial and social incentives for pursuing advanced research. “Even if you do a PhD in India, you won’t get a salary better than a BTech. So, the incentives are not aligned,” Anand emphasised. This, he said, was because there were hardly any companies in the country that needed such talent.

At the recently concluded VLSID Conference 2025, many industry leaders, such as Santhosh Kumar, MD at Texas Instruments, and Hitesh Garg, VP and India MD at NXP Semiconductors, emphasised the heavy reliance on a robust talent pipeline and a thriving startup ecosystem.

Regardless, many others pointed out the opposite—the lack of quality or proficient talent. 

Chris Miller, the acclaimed author of Chip War: The Fight for the World’s Most Critical Technology, further highlighted this. He identified talent and infrastructure as two key challenges in India’s path to progress in the chip space. 

In a conversation with Satya Gupta, president of the VLSI Society of India, Miller called for sustained investment in India’s talent pipeline, including both technical and business talent.

The Indian ‘Brain Drain’

A significant proportion of India’s top talent migrates abroad, attracted by better opportunities and infrastructure. This ‘brain drain’ exacerbates the shortage of highly skilled professionals required to drive deep tech advancements within the country.

With its vast population, India has the potential to produce a significantly larger number of engineers and scientists than smaller countries like Switzerland, Germany or even the United States. 

These countries thrive despite their smaller local talent pools thanks to their vibrant innovation hubs. Anand highlighted that this is largely because they attract top talent from around the world and have created a quality brand for their country.

The US, for instance, didn’t rely solely on local institutions to build Silicon Valley. Instead, it created a global brand, ‘the American Dream,’ that drew skilled professionals from across the globe. 

Switzerland and Germany also created a monopoly in their local products with the guarantee of ‘Swiss’ or ‘German’ quality. 

India, by contrast, has yet to establish a similar pull. The country lacks the global appeal to attract international talent at scale. “We don’t have the kind of infrastructure to support this,” added Anand. 

Nevertheless, There is Hope

Currently, 20% of the global semiconductor design talent comes from India, with over 35,000 engineers engaged in chip design. “I think India has a large talent base in chip design because it’s developed investment from a whole variety of international firms in India,” Miller told AIM.

Home to institutions like IIT Kanpur and IIT Roorkee, India’s tier 2 and 3 regions are the real reservoirs of untapped potential. Moreover, while local talent may exist, it is often underutilised. 

Sandeep Bharathi, CDO at Marvell Technology, told AIM that the company is capitalising on its skilled workforce to drive innovation and growth and bring it closer to the goal of achieving $1 million in revenue per employee. 

With a major presence in India, out of Bengaluru, Pune, and Hyderabad, Marvell leverages these tech hubs for their rich talent pools, with Bengaluru leading as a centre for tech innovation. The company has “more than doubled its Indian workforce over the last four years,” demonstrating confidence in the region’s talent.

Bharathi said the company sources its talent directly from universities, ensuring a steady pipeline of early-stage professionals through partnerships and internship programs. These internships are often converted to full-time roles, providing opportunities for young professionals to grow within the company. 

In addition to organic growth, Marvell acquires companies with specialised technologies, gaining access to niche talent that strengthens its workforce in advanced domains.

Even though India offers strong capabilities in digital design, verification, and physical design, Bharathi says there are skill gaps in areas like silicon photonics, electro-optics, and advanced mixed-signal design. 

He stressed the need for academia to align the curriculum with industry needs to address these gaps. The company collaborates with universities to influence course content, bridging the skill gap through improved syllabi and practical training. 

While universities are introducing courses in emerging fields like quantum computing and space tech, practical exposure for students remains an area for improvement.

Govt’s Role in Driving India’s Deep-Tech Ecosystem 

According to Anand, the government’s intent to support innovation is clear. “Two years ago, I could have listed many things the government needed to do, but now, they’ve made significant progress,” he said. 

State governments have been continuously investing in semiconductors, launching initiatives such as the Karnataka government’s approval of ₹3,425.60 crore investment and Andhra Pradesh’s recently signed ₹14,000 crore MoU. 

The central government is also stepping up its policies to foster technologies that will boost India’s semiconductor mission. However, implementing these policies effectively remains a challenge. 

Anand also highlighted the importance of the government becoming a customer of innovative solutions. “If the government becomes a customer, it signals to investors that the startup can successfully sell its product at a scale, and that drives further investment.”

Even private companies are pitching in. On his recent visit to India, Michael Hurlston, CEO of Synaptics, outlined to AIM the company’s plans to double its workforce there over the next three years, increasing from 400 to 800 employees. 

This expansion is driven by India’s rich pool of engineering talent. The existing talent in cities like Bengaluru and Chennai are open to quick upskilling to meet the demands of cutting-edge technology.

Additionally, companies like NXP Semiconductors, Israel’s Tower Semiconductor, Adani Group and Bartronics India Ltd are fostering India’s semiconductor industry with investments and partnerships ranging from $1-10 billion.

Electronics and semiconductors contribute 5.6% of India’s GDP today. As the global demand for AI-driven solutions rises, India is positioning itself as a key player in the semiconductor industry. 

Marvell Technology, an American semiconductor developer, is among the global semiconductor giants tapping into India’s potential. 

In an interview with AIM, Sandeep Bharathi, CDO at Marvell Technology, discussed the company’s focus on advancing data infrastructure from cloud data centres to focus on moving, storing, processing, and securing data. 

How is the Company Performing in India?

Marvell has steadily increased its footprint in India, with three major sites in Bangalore, Pune, and Hyderabad. The company, which employs over 1,500 professionals, collaborates with universities to upskill talent. This reinforces India’s role as a semiconductor hub.

“The way we take a look at it is that Marvell has around 7,000 employees globally. Next year, we’ll hit a million-dollar revenue per employee, which is an important milestone,” Bharathi said. 

Moreover, he highlighted a slowdown in certain sectors, such as enterprise and automation, saying, “The way we look at it is, ‘It’s a diversified product portfolio, and we want to be in businesses where we make money’.”

Position in the Semiconductor Market

In the global semiconductor landscape, Marvell Technology stands alongside giants like NVIDIA, Broadcom, Qualcomm, and AMD in terms of market capitalisation. When asked about its competitive edge, Bharathi attributed it to the company’s reputation as a breakthrough innovator. 

“The market is giving us our size multiple only because we are bringing technologies to the market that people want and care about…That’s the reason you can see the market react.”

One of the most significant challenges in semiconductor development is cost. Advanced process nodes require substantial investment, and development costs for a single chip can range from $100 million to $200 million. 

This makes precision and getting it right at the first chance critical for success. “Missing the market window due to errors could result in significant financial and time losses,” he added. 

Packaging is Key  

Packaging technologies are critical in the semiconductor industry, particularly for creating cost-effective and energy-efficient solutions for data centres. 

With massive infrastructure and power demands, data centres benefit from advancements in 2D, 2.5D, 3D, and 3.5D packaging. These innovations improve chip integration and reduce energy consumption while enhancing performance.  

Another essential element is data movement from chip to chip, board to board, or rack to rack. “Signaling technologies that are necessary to do this are complex, whether it’s data bandwidth is 100G, 200G, 400G,” Bharathi said.

Higher Investments in AI, Efficiency and R&D

Marvell Technology continues to prioritise research and development (R&D) by focusing on advanced geometries like 3nm and 2nm. These cutting-edge technologies, which increase in cost by 30% annually, require significant investment. 

The company has doubled its R&D footprint in recent years, reflecting its commitment to innovation. Over the past five years, Marvell’s revenue has grown from $3.3 billion to a projected doubling by next year. Over 70% of the company’s revenue comes from enabling infrastructure for AI applications, such as hyperscale data centres. 

Additionally, Marvell develops semiconductor solutions for 5G and automotive Ethernet to support connected cars. These solutions include linking sensors, radar, LiDAR, and cameras through Ethernet backbones to enable seamless communication within automotive systems.

As energy demands rise, the company prioritises energy-efficient chip designs to support the sustainability of large-scale data centres. This aligns with broader industry goals to reduce environmental impacts.

Contrary to popular opinion, Bharathi called data localisation an impossible task. “It’s great to talk about, oh, we have to keep the data localised. I honestly don’t think that’s going to happen…The only way is if we relocate an entire city to the middle of nowhere, and you start from scratch.”

What do Other Leaders Have to Say?

During a fireside chat at the VLSID Conference 2025, the panelists highlighted India’s ambitions to grow its semiconductor contribution and accelerate the Viksit Bharat 2047 initiative. 

Santhosh Kumar, MD at Texas Instruments, highlighting India’s potential, said, “By 2047, with a projected GDP of $30 trillion, electronics and semiconductor contribution could grow to 10%, equating to a $3 trillion industry.”

Other industry veterans, including Sanjay Nayak, co-founder of Tejas Networks, and Ganapathy Subramaniam, managing partner at Yali Capital, also emphasised this.

Subramaniam further said that, unfortunately, even though India consumes a lot of electronic gadgets, 5% of the electronics stack, roughly 25% of those electronics are semiconductors. “We contribute nothing as an Indian headquarters.” 

What is the Goal for India?

The US dominates global semiconductor design, accounting for 75% of the total, followed by Taiwan, Korea, Japan, and Europe. America has the chip design market but not as much of a consumer market. India contributes significantly to talent but lacks domestic intellectual property rights (IPR).

The path to becoming a semiconductor powerhouse involves building robust intellectual property (IP) and fostering a domestic ecosystem for product development. While India hosts a significant portion of global semiconductor design talent, multinational corporations own a large portion of the intellectual property.

The goal is to increase India’s value addition in semiconductor manufacturing from the current 10% to 40–50% by 2047. Achieving this would result in a 100-fold increase in value addition compared to today, which is essential for driving economic growth, creating jobs, and securing a strategic economic position globally.

Partnerships are Essential

A key takeaway is the need to create India-centric innovations for sectors such as mobility, renewable energy, and telecommunications. With the advent of electric vehicles, solar power systems, and next-generation communication technologies, the demand for India-specific semiconductor solutions is surging. 

Nayak said that strengthening India’s semiconductor ecosystem by fostering partnerships with GCCs within India is crucial. 

With India’s vast talent pool and market capacity, there is a unique opportunity to create mutually beneficial partnerships. 

“Japan is an ageing economy with an average age of 50. Huge technologies are available, like OLED display, But they have not been able to compete squarely with Korea and China,” Subramaniam added. 

Two-Wheelers Could be a Big Opportunity

The two-wheeler market is another highly beneficial local market for India. The country’s growing consumption of chips and electronics provides a foundation for this approach. 

“Two-wheeler, automobile, it’s our market. Why do we make controllers, which are four-wheeler controllers, for our two-wheeler market? It’s a large market,” Subramaniam said.

Moreover, the strategic importance of semiconductors in national security and economic growth was underscored. 

India can secure a seat at the global technology table by developing domestic manufacturing capabilities and focusing on partnerships with global players. The conversation also called for nurturing talent in areas like product management and system design to ensure end-to-end capabilities.

There is no stopping Jensen Huang. After sovereign AI, NVIDIA’s chief has a newfound obsession, mostly revolving around self-driving cars and AI agents. Speaking at CES 2025, he highlighted the potential of robotaxis and autonomous vehicle (AV) technologies to transform global mobility and logistics. 

“I predict that this will likely be the first multi-trillion dollar robotics industry,” he said in his keynote. This claim comes amid a growing wave of innovation, investment, and competition in the autonomous driving landscape.

Nvidia CEO Jensen Huang tonight on robotaxis and self-driving: “I predict that this is going to be the first multi-trillion dollar robotics industry.” pic.twitter.com/QVTnwhdMUY

— Sawyer Merritt (@SawyerMerritt) January 7, 2025

Robotaxis show promise in reducing traffic congestion, lowering emissions, and providing mobility solutions that are accessible to millions worldwide.

Moreover, the integration of autonomous vehicles into public and private fleets is expected to create millions of new jobs in AI development, system integration, and maintenance, further cementing the industry’s economic impact.

Breakthroughs in AI platforms, sensor technologies, and cloud computing are backing the push for autonomous mobility. Companies like NVIDIA have introduced platforms such as DRIVE Hyperion and Cosmos to streamline the development of AV systems. 

DRIVE Hyperion enables autonomous vehicle manufacturers to handle perception, mapping, and decision-making efficiently, while the recently launched Cosmos platform generates synthetic driving environments for training AV algorithms. 

Using tools like AI traffic generators and neural reconstruction engines, Cosmos creates high-fidelity 4D simulations, turning hundreds of real-world drives into billions of effective miles for training data.

Real vs Synthetic Data Debate

The role of synthetic data in training AV systems has sparked debate among industry experts. Sawyer Merritt, an investor at Tesla, referred to NVIDIA’s Cosmos and pointed out that synthetic data, while innovative, cannot replace the reliability of real-world video driving data. 

“Synthetic driving data is like using ChatGPT—you might trust what you see is true, but you often can’t be entirely certain without further validation,” he said.

Merritt emphasised Tesla’s unmatched advantage: over 7.1 million vehicles on the road worldwide, collectively driving upwards of 75 billion miles annually, with more than 56 million onboard cameras capturing real-world video data.

The company’s cars capture real-world driving scenarios, offering unmatched insights for self-driving. 

In a recent conversation with AIM, Sami Atiya, president of the robotics & discrete automation business area at ABB, also expressed his views on the subject. He believes synthetic data will play a huge role in robotics as the company is already using it for “arm simulations and complex path-planning” for its in-house robots. 

Synthetic data opens up endless possibilities without ever needing to touch the robot. But he also reminded us to be wary of any biases or misleading elements in the data. “The main expertise of the people who actually use these AI systems will become much more crucial to know the right input and output of data that is not biased,” Atiya said.

He agreed with Ilya Sutskever on the end of traditional pre-training due to data limitations, emphasising AI’s reliance on scaling models and exploring agents and synthetic data as the future of AI innovation. “We will reach a plateau, and we are about to see more capacity being thrown at systems,” he said.

An Industry on the Move

Waymo, Alphabet’s self-driving subsidiary, has been conducting extensive real-world trials and is expanding its operations in cities across the United States and in Tokyo early this year. 

Meanwhile, Cruise, a subsidiary of General Motors, has been deploying autonomous taxis in select locations, including San Francisco and Phoenix. At the same time, Mobileye, an Intel company, launched a unique sensor technology for layered visuals, which generates 3D perception for a reliable understanding of the environment. 

Mobileye’s latest system on a chip, the EyeQ6, powers this advanced processing, as announced by founder and CEO Amnon Shashua in his keynote address at CES 2025. The tech, which offers high-resolution sensing capabilities that address camera weak spots, will enter production in 2026. 

NVIDIA also recently announced collaborations that will shape the future of autonomous vehicles. Toyota, the world’s largest automaker, is building its next-generation vehicles on NVIDIA DRIVE AGX Orin, running the safety-certified NVIDIA DriveOS operating system. 

These vehicles will offer functionally safe, advanced driving assistance capabilities. Also, partnerships with companies like Aurora and Continental highlight the widespread adoption of these technologies across legacy automakers. 

Other leaders using Cosmos to build physical AI for AVs include Fortellix, Uber, Waabi and Wayve. Such partnerships aim to overcome challenges in autonomous driving and ensure rapid deployment of robotaxis and self-driving fleets worldwide. 

For instance, HERE Technologies and AWS recently announced a $1 billion partnership to develop AI mapping solutions critical for precise navigation.

Meanwhile, Uber and NVIDIA recently announced a partnership to support the development of AI-powered autonomous driving technology. More details on this are expected later this year. 

Dara Khosrowshahi, CEO of Uber, said in the official announcement, “Generative AI will power the future of mobility, requiring both rich data and very powerful compute.” 

With Uber completing millions of trips every day, Khosrowshahi hopes to create safe and scalable autonomous driving solutions for the industry. Now, major companies look forward to pairing up with the NVIDIA Cosmos platform and NVIDIA DGX Cloud to help build stronger AV partners.

Additionally, Amazon and Qualcomm have also announced a collaboration to revolutionise in-car experiences by combining Qualcomm’s Snapdragon Digital Cockpit platform with Amazon’s AI and cloud services. 

Last month, Volvo Cars CEO Jim Rowan met Qualcomm president & CEO Cristiano Amon for a lap in the eX90 and a chat about the car as the new computing space.

The Landscape in India, Starting in Bengaluru

Bengaluru, known for its traffic and tech innovation, is emerging as a key player in India’s autonomous vehicle landscape. 

The Bengaluru Traffic Police’s exploration of a digital twin for traffic management signals a tech-forward approach crucial for enabling robotaxis and autonomous vehicles. 

Bengaluru’s police commissioner envisions a future where AI boosts enforcement and management, serving as a ‘force multiplier’ to meet the city’s unique needs. However, infrastructure upgrades, better rule adherence, and two-wheeler-focused technologies remain critical.

AI-based cameras reduce violation processing time from 300 seconds to 5 seconds. While enforcement leverages rule-based AI effectively, traffic management faces challenges like unpredictable road behaviour, requiring real-time adaptability and instant decision-making for optimal impact.

With the US diversifying its chip strategy and containing China’s dominance by imposing trade restrictions, the geopolitical shift could be pivotal for driving India’s semiconductor aspirations, author Chris Miller said. He is noted for his book ‘Chip War: The Fight for the World’s Most Critical Technology’.

Miller spoke at the ‘Chip Pe Charcha’ event, a semiconductor industry discourse held at the VLSID International Conference 2025 in Bengaluru on Monday. He further highlighted the critical role of AI processors in driving innovation, describing AI as the “killer app of this century”, even as its potential is yet to be explored. 

Geopolitical tensions have fragmented the semiconductor industry, creating separate spheres of influence led by China and the rest of the world and impacting supply chains and market dynamics. Today, not a single country in the world is self-sufficient in semiconductors across the supply chain. Everyone is reliant on somebody else.

Praising India’s focus on fostering design, manufacturing capabilities and strengthening partnerships with global leaders, Miller said, “India’s proactive semiconductor policies and investments position it as a significant player…The broader electronics ecosystem here in Bengaluru and Tamil Nadu is exploding, I think.”

In a previous discussion with Satya Gupta, president of the VLSI Society of India and Epic Foundation CEO, Miller noted that the explosion of AI technologies has driven demand for specialised semiconductors like GPUs while also advancing chip design and manufacturing efficiency through AI-powered innovations.

The global rush to build fabrication facilities may lead to overcapacity in traditional semiconductors, although advanced chips for AI and electric vehicles remain in high demand with persistent shortages.

Global Semiconductor Rivalry

The global semiconductor industry is witnessing fierce competition between the United States and China, with tensions escalating over technology dominance. 

Semiconductor production requires contributions from multiple global players, such as lithography machines from the Netherlands-based semiconductor company ASML, advanced fabrication in Taiwan, and design expertise from the US. 

This reliance on partnerships has led to a deepening technological collaboration between the US and India. In recent years, India has aligned its policies to boost domestic semiconductor manufacturing and integration, making it an attractive partner for global supply chains.

While China races to close the gap in advanced technology, challenges like dependency on imported equipment and a five-year lag behind Taiwan’s Taiwan Semiconductor Manufacturing Company (TSMC) persist. 

Advising prioritising talent development, Miller said, “If you’re investing in talent, you’re taking very distributed bets.”

While acknowledging India’s foundational work in manufacturing and packaging, he encouraged the exploration of niche areas like 3D packaging and compound semiconductors for the energy transition. These, he argued, could offer India a competitive edge without requiring the massive capital investment of traditional manufacturing.

“Just to take an example, the way AI is growing, it will need more computers and more memory. So our best solution is with two virtual engineers, 3D representation,” he added.

India’s Vision

India’s semiconductor sector is poised for transformative growth, as highlighted by Satya Gupta during the VLSID inauguration. With the country’s electronics consumption projected to grow from $200 billion today to $3 trillion by 2047, semiconductors are expected to account for a staggering $810 billion of this market. 

Strengthening Global Semiconductor Ecosystem!

India is forging robust international partnerships to create a trusted, resilient & diversified global semiconductor ecosystem to drive innovation, ensure sustainable growth, and unlock new opportunities.#ISM #SemiconIndia pic.twitter.com/a3fmeEdQbb

— India Semiconductor Mission (@Semicon_India) January 4, 2025

Gupta described this as an opportunity, positioning India to become a major global player. Gupta emphasised initiatives like regional semiconductor chapters across India to decentralise development and foster localised innovation. 

Efforts such as the VSIP internship programme aim to bridge gaps between academia and industry, ensuring students are industry-ready. Additionally, partnerships with global foundries will grant academic institutions access to cutting-edge 55nm nodes, which will enable hands-on experience for aspiring engineers.

Hitesh Garg, VP and India MD at NXP Semiconductors, also emphasised, “The semiconductor industry’s future growth and innovation rely heavily on a robust talent pipeline and a thriving startup ecosystem.”

India’s ambition extends beyond global markets, with untapped opportunities in infrastructure and logistics sectors. Gupta called for leveraging advanced technologies to modernise domestic industries and further boost the country’s economic footprint. 

Energy Challenges and AI

As AI continues to evolve, its energy demands are becoming a critical concern. The event showcased the critical role of VLSI and embedded systems in driving transformative advancements across AI/ML, 5G, internet of things (IoT), quantum computing, and electric vehicles.

With AI applications being tested at both the network core and the edge, experts warn that the technology’s rapid growth could result in a 40-fold increase in usage. Projections suggest that by 2030, AI might consume 20% of the world’s electricity. 

This raises pressing questions about sustainability and the cost of powering AI-driven data centres and devices. Currently, the cost of energy for AI queries is often overlooked. However, as AI use expands, it will give way to significant financial and environmental challenges. 

Miller highlighted this growing crisis during the discussion and said that some economies are already experiencing an increase in electricity consumption directly linked to AI. Despite these concerns, Miller expressed optimism and stressed the history of computing as a model for achieving greater efficiencies. 

He emphasised the importance of continuing this trend by focusing on innovations in hardware, software, and energy-efficient system design. As market demand grows, so will the pressure to find sustainable solutions.

The rise of AI presents both challenges and opportunities. Balancing its energy needs with environmental sustainability will be a key focus for the next decade. This shift demands collaboration across industries and regions to ensure that AI’s growth remains efficient and accessible.

“I think there’s two things that I’m always struck by in talent development. One is the technical talent, and two is the business talent,” said Miller, with a call for sustained investment in India’s talent pipeline, encompassing both technical and business acumen.

The global semiconductor industry has experienced a significant change over the past few years, driven by disruptions caused by the pandemic, changes in consumption behaviour, and rising geopolitical tensions. As the world increasingly relies on state-of-the-art technologies, securing a stable chip supply has taken centre stage.

The onset of the COVID-19 pandemic five years ago turned the global semiconductor industry upside down. Unlike past economic disruptions, this crisis simultaneously hit both supply and demand. Factories in key hubs like China shut down, leading to chaos amongst chip makers.

The crisis highlighted the risks of overreliance on geographically concentrated supply chains and pushed companies to diversify and localise production. Notably, the US has emerged as a key player by using government incentives and private investments to alter the global landscape of semiconductors.

America’s Chip Comeback

Recognising the need to secure its semiconductor supply, the US government introduced substantial incentives to encourage domestic semiconductor manufacturing in 2022. This was an attempt to lower costs, create more localised jobs, strengthen the supply chain in the US and counter China’s advancements in chip production.

The CHIPS and Science Act, passed in 2022, allocated $52.7 billion to boost US semiconductor research, manufacturing, and workforce development.

America invented semiconductors.

But when President Biden took office, the U.S. produced only 10% of the world’s supply.

Thanks to his CHIPS and Science Act, we’ve catalyzed hundreds of billions of dollars in private sector investment and are finally bringing U.S. semiconductor… pic.twitter.com/Tx9GFdok22

— The White House (@WhiteHouse) December 28, 2024

The Act also allocated $1.5 billion to advance wireless technologies, support emerging fields like AI and biotech through new National Science Foundation (NSF) initiatives, and fund regional innovation hubs to boost local economies. 

Following the Act, companies announced nearly $50 billion in additional investments in American semiconductor manufacturing, which included a $40 billion investment by Micron in memory chip manufacturing and $4.2 billion through a partnership between Qualcomm and GlobalFoundries. 

In April last year, the US finalised a $6.6 billion subsidy for Taiwan Semiconductor Manufacturing Company (TSMC)’s production facility in Phoenix, Arizona.

Impressive. Chips Act funding got basically every major chipmaker to build in the US.

“That means the US will become the only country in the world with facilities run by all of the top manufacturers.” pic.twitter.com/yMSqfTzg5c

— Kyle Chan (@kyleichan) April 25, 2024

Moreover, as part of the CHIPS and Science Act, Samsung Electronics was awarded up to $6.4 billion from the US government to build its new complex in Taylor.

Why Favour America?

Several factors make the US a sought-after hub for semiconductor manufacturing. The country offers a secure environment compared to regions with geopolitical tensions for a steady and dependable supply of these essential components.

Several AI chip companies, including TSMC and Samsung, have been shifting their focus to building manufacturing facilities in the US. TSMC’s Arizona facility has achieved a 4% better yield than the semiconductor giant’s manufacturing sites in Taiwan. 

Notably, states like Arizona and Texas provide ideal climate conditions for chip manufacturing facilities. Access to advanced research institutions, skilled labour, and strong infrastructure supports high-tech manufacturing.

Locating production facilities closer to major clients facilitates better collaboration and reduces logistical complexities. For example, TSMC’s Arizona plant is expected to serve clients such as NVIDIA, Apple and AMD, enhancing operational efficiency. 

Chipping In to Power the AI Revolution

During the COVID-19 pandemic, the demand for semiconductors used in cars, phones, and gadgets fell sharply as people tightened their budgets. At the same time, chips for cloud computing and home internet equipment saw a surge in demand, driven by the rise of remote work and online activities.

The AI revolution has ushered in a new wave of demand for advanced semiconductors. At the core of AI are processors like GPUs, CPUs, and accelerators from NVIDIA, AMD, and Intel, powering models like generative AI. 

Data centres, transformed by companies like Dell and HPE, provide the infrastructure for AI to scale. Meanwhile, while innovators like ASML and TSMC create smaller, faster, and more efficient chips, Qualcomm and ARM’s custom designs extend AI into devices and industries.

Chip production shines with innovators like ASML and TSMC, which create smaller, faster, and more efficient chips. Qualcomm and ARM’s custom designs extend AI into devices and industries. Meanwhile, companies like Micron and Western Digital provide robust data storage solutions, and design tools from Synopsys and Cadence speed up innovation.

These advancements have enabled AI to move from theory to real-world applications. Michael Hurlston, CEO at Synaptics Inc., recently claimed to make the chip design even more efficient and cost-effective by shrinking AI models and optimising software to fit within a minimal memory footprint.

Innovating for a Smarter Future

As per reports, the new fabrication unit in Arizona, which produces 3nm and 4nm chips, will develop Apple A16 chips in the US. Additionally, AMD plans to manufacture its AI high-performance chips (HPC) at this facility in Arizona.

China has also rapidly closed the gap with the US in AI capabilities. As reported recently, it was only six to nine months behind the US. “We were six or seven years behind,” 01.AI chief Kai-Fu Lee had said. Now, however, China seems to have surpassed the US. 

In retrospect, while the government’s benefits may have helped attract the attention of these giants, they could also have adversely affected their supply chains. With the rise in regulations surrounding the export of AI chips to China, Washington plans to also limit semiconductor shipments to some countries accused of supplying to Beijing in order to Close China’s Backdoor Access.

When Apple finally stepped into AI this year, it proudly called it ‘Apple Intelligence’, ditching the ‘artificial’ prefix altogether. That move has aged like milk – at least in the short term. Apple Intelligence’s latest outputs are nothing but artificial and, in one case, have proven to be disastrous. 

A few days ago, the company sent out a bizarre notification on the iPhone regarding a BBC news report about the arrest of Luigi Mangione, the lead suspect in the murder of UnitedHealthcare’s CEO. “Luigi Mangione shoots himself…” read a part of the notification. 

The original post from BBC read: “People who knew him told US media he suffered from a painful back injury and that he had become socially withdrawn in recent months.”

This was followed by: “Mr Thompson, 50, was fatally shot in the back last Wednesday morning outside the Hilton hotel in Midtown Manhattan where UnitedHealthcare, the medical insurance giant he led, was holding an investors’ meeting.”

In the first paragraph, the BBC refers to Mangione, while in the second, the victim is Thompson. Apple Intelligence most likely misinterpreted the context of the news article. Following the fiasco, the BBC complained to Apple about the same. 

AIM reached out to Apple but did not elicit a response.

Apple Shouldn’t Add Fuel to The Fire

Errors like these could have terrible consequences in a country like India, where the problem of fake news is already a huge one. According to the World Economic Forum’s 2024 Global Risks Report, India ranked the highest for the risk of misinformation and disinformation. 

According to the report, which surveyed 1490 experts from academia, business, government, and civil society, ‘AI-generated misinformation and disinformation’ ranked second only to ‘extreme weather conditions’ in the global risk landscape. 

“Synthetic content will manipulate individuals, damage economies and fracture societies in numerous ways over the next two years,” the report warned. 

The emergence of another way to amplify the spread of fake news is the last thing India needs. Misleading headlines and inaccurate summaries of news on sensitive topics could cause unrest in a country like India. 

For example, in 2020, two individuals fell victim to violent lynching fueled by WhatsApp rumours about local thieves. Mistaken identity led to the brutal attack, leaving them injured. 

Moreover, iPhone 16, Apple’s latest offering that supports Apple Intelligence, hit record sales on the opening day in India. The numbers recorded an increase of 15-20% compared to last year. Research from Counterpoint for Q3 24’ showed that Apple occupied a 21.6% market value share, only below Samsung. 

“As consumers increasingly invest in premium smartphones, Apple has cemented its status as the top choice for premium buyers in India, supported by its aspirational image and expanding footprint,” read the report. 

“Experiencing a high-growth phase in India, Apple recorded 34% YoY growth. Q3 2023 also marked the best quarter for Apple’s shipments in the country, which crossed 2.5 million units,” read another report. 

Coming back to Apple Intelligence, the BBC mishap should not come as a surprise. Misinterpreted, misleading, and bizarre notification summaries in Apple Intelligence have become the internet’s latest meme sensation. 

Notifications Gone Rogue

Apple’s intent with summaries is to scan important details, especially in group chats, to help the user get key information quickly. In a user guide, Apple said, “With its deep understanding of language, Apple Intelligence can help condense the information most important to you.” 

But does it? 

For context, there is an entire subreddit called r/AppleIntelligenceFail, where users share some of the most confusing and out-of-context results derived from Apple Intelligence. 

apple intelligence notification summaries need to chill.

my ring doorbell detected 5-10 people at the door over the course of the day and the apple summary got me thinking there was an angry mob outside my house pic.twitter.com/OJkY7URWlH

— Nick “Lindy”quist (@nick_lindquist) December 10, 2024

In one post, a user on Reddit showcased an error where Apple Intelligence mixed up the context between two notifications. 

The first notification showed Alex Greenwood being injured in a football game she was playing and Dejan Kulusevski scoring a goal in the game he was playing. 

But Apple Intelligence mixed them up and said, “Kulusevski and Greenwood were injured in their respective matches.” 

Summaries need some work
byu/googang619 inAppleIntelligenceFail

If there’s one clear thing, it’s that AI models, especially the ones inside iPhones with Apple Intelligence, struggle to understand context, slang, and nuances in conversations. 

This was also a concern when Reddit released the AI Answers feature, which summarises threads based on user input. 

The content on Reddit is mostly riddled with sarcasm, insider jokes, and references that the community enjoys reading. Is it fair then that AI is allowed to meddle with it? 

Moreover, sticking to its privacy promise, Apple has been hell-bent on keeping the AI models local and on devices. And if the AI models need to route their inputs to the cloud, they will do so using their Privacy Cloud Compute (PCC). 

However, Apple says the ‘cornerstone of Apple Intelligence is on-device processing’. But how capable can an on-device model be? Apple hasn’t revealed any details about the parameter size. Still, if what we’ve seen is anything to go by, it is far from capable of understanding the nuances of human conversations. 

Not Many are Interested in Apple Intelligence

A recent survey adds insult to Apple’s injury by suggesting that a majority of iPhone users do not find Apple Intelligence to add any value. The survey, conducted by Sellcell, included 1,000 users who owned iPhones with Apple Intelligence. 

About 73% of the respondents said that they were not satisfied with the AI features and failed to find enough value. However, 47% of iPhone users said that its AI features were ‘somewhat an important deciding factor’ while buying one. 

This is, of course, not what Apple expected, given the standards they have set. Quinn Nelson, a popular YouTuber, reacted to the survey results and said, “Perhaps that’s because Apple Intelligence does very little to nothing in value so far.”

“Had to turn Apple Intelligence off. Just not ready for prime time. Notification summaries were wrong and incoherent. Auto-replies in iMessage were comically mundane,” said Morgan Brown, VP of product & growth at Dropbox, in a post on X.

Clearly, there’s a lot of work to do be done for Apple. It wouldn’t want another smartphone maker to take another bite of that fruit. 

Ask an Indian IT company about how it uses AI, and you will learn nothing. This highlights why such companies remain service-driven rather than product-focused. Many of them also shy away from revealing the revenues they earn from their investments in generative AI.

To get some clarity about why this is the case, AIM spoke with Nachiket Deshpande, COO at LTIMindtree, and he did not hold back.

Commenting on the recent deal with Voicing AI, in which LTIMindtree committed $6 million to build human-like AI voice agents, Deshpande said, “There are so many startups that are coming all around the world. We would want to leverage those startups for those technologies that are coming up.”

Elaborating on the philosophy that LTIMindtree follows when it comes to AI, Deshpande said the company stands on three pillars: AI in everything, everything for AI, and AI for everyone.

He added that AI solutions must integrate seamlessly into users’ existing workflows. For example, if someone uses SAP, ServiceNow, or Outlook daily, the AI solution should meet them there; not as a separate platform. “This is what we refer to as the co-pilot approach, ensuring AI systems are agentic, API-driven, and omnipresent.”

GenAI is Moving Too Quickly

“Over the last two years, there’s been overwhelming noise around generative AI. My challenge was to build a strategy that is simple to adopt, enabling all 86,000 employees at LTIMindtree to align with it,” Deshpande revealed. “More importantly, I wanted a pragmatic approach: something relevant to us and not just general AI industry discourse.”

Unlike other IT companies like Infosys or TCS, which are claiming to be building in-house generative AI solutions, LTIMindtree has decided to be transparent and said that there is no point in spending so much time and money on building AI products when so many have already been built.

“Any technology we develop today risks becoming obsolete in a matter of months, and keeping up would require significant capital investment. The P&L structure of services companies like ours is fundamentally different from product companies,” Deshpande explained.  “They operate with 80% cross-market, and hence they have the ability to continue to do R&D, and we operate at 30-35% cross-market.”

He believes that if a company invests and builds a particular technology like AI, it might soon become irrelevant. “I need to get 86,000 people to reimagine their work with AI, but I only need 2,000 people to build AI solutions,” he said. According to him,  even that number is high and requires a lot of investment.

“The differentiation of LTIMindtree will lie in terms of how we adopt AI, rather than saying I have another shiny toy which is better than somebody else. Because that differentiation is short-lived,” he added.

What is LTIMindtree’s AI Goal?

Deshpande explained that if a company wants to take an AI solution from proof of concept (POC) and roll it out to 10,000 customer service agents, it needs all of this to be built within the organisation in advance.

Following the three pillars of its philosophy, LTIMindtree wants to reimagine every service it offers with AI – to move AI solutions from POC to large-scale deployment. For instance, rolling out solutions to 10,000 customer service agents. This creates a new revenue opportunity for us as customers invest in these capabilities.

Apart from Voicing AI, the IT firm also closed a $240 million deal in the manufacturing sector, where it replaced three competitors by consolidating the client’s application maintenance and running a portfolio with an AI-first approach. Since then, LTIMindtree has announced five to six similar AI-centric wins, with a large portion of the pipeline also reflecting this strategy.

These are just a few of the examples. One of the most successful generative AI applications by LTIMindtree is Canvas, which is a platform specifically designed to take AI-driven ideas into production. Deshpande said that over 13 customers live on the platform, which integrates seamlessly with their other AI investments. 

“I predict every single dollar of revenue will have a generative AI component embedded in it,” he revealed.

Many IT firms like Mphasis and Persistent Systems are increasingly focusing on agentic AI. Larger players like Infosys and TCS are also building multi-agent systems. Deshpande believes this shift is happening because the biggest productivity gains lie in persona-centric AI solutions.

For example, in a team, small productivity improvements for every individual don’t create a monetisable impact. “But if a developer delivers better story point velocity, a support engineer resolves more tickets, or testing cycles shrink from weeks to days, the gains become significant. Agentic systems automate large portions of a persona’s workflow, delivering tangible productivity outcomes,” he added.

When asked about why all Indian IT companies do not reveal the revenue from generative AI, Deshpande said that for LTIMindtree, almost every service has AI embedded in it. “It is not a revenue stream for IT services companies. For NVIDIA, it will be a revenue stream. For Microsoft, it will be a revenue stream.”

For LTIMindtree, however, it will not be a bigger revenue stream. Instead, it will be the key revenue stream.  Considering that the impact of AI is much bigger than any revenue component any of the service companies will give, Deshpande concluded, “Counting AI revenue is not a measure that we would like to go after because I think it misrepresents the impact of AI.

The future of SaaS looks bleak. Recently, Klarna CEO Sebastian Siemiatkowski announced that the company will end its service provider relationships with Salesforce and Workday as part of a major internal overhaul driven by AI initiatives.

“This news from Klarna should have every enterprise SaaS company shaking in their boots. If an internal team using AI can replicate over 20 years of work and customisation from Salesforce and Workday, to the extent the company doesn’t feel the need to pay for these tools anymore, everything we know about the stickiness and durability of enterprise software needs to be rethought in the light of AI,” Gokul Rajaram, former Coinbase board member and early stage startup investor, said.

Klarna is not alone. In an exclusive interview with AIM, Harneet SN, founder of Rabbitt AI, revealed that he is partnering with the University of California, Berkeley, to create AI-powered tutors for their online learning programs. He said that the university has opted to move away from its previous SaaS providers in favour of building in-house solutions.

Harneet cited an example of another company that previously relied on voice bots and chatbots from Yellow.ai. However, as they seek to integrate generative AI capabilities into their voice bots, they are now opting to develop their own chatbots. “Yellow.ai’s SaaS-based chatbots are not working well for them in the GenAI era,” he added.

Many feel that with the advent of GenAI coding tools like GitHub Copilot and Anthropic’s Claude, one can expect software development to become cheaper and the job market for coders to evolve, creating a more accessible environment for talent, although at lower price points.  

“You can rebuild most enterprise SaaS functionality, host for super cheap, and get basically [over] 90% functionality,” said Akber Khan, founder of Evolve Machine Learners. His company is currently building in-house SaaS solutions for large enterprises.  

Building on this idea, a user posted on X, “My general belief is that the next decade is going to be B2C, not B2B. Generally, AGI/AI will increase people’s capabilities enough [so] that B2B SaaS won’t be a good purchase. You can just build it in-house.”

SaaS companies are not alone. Indian IT giants such as TCS, Infosys, Wipro, HCLTech, and others, which are arguably still testing the waters of GenAI, could soon face a critical challenge when spending on their services becomes redundant. With AI tools, anyone within enterprises may be able to build front-end, web, and other applications with minimal coding.

AI Coding Tools Are All You Need

“Generative AI can now take on substantial workloads in software development, particularly in bug fixing, vulnerability remediation, and even optimising code quality,” said Asankhaya Sharma, founder of Patched AI. He added that Patched’s work with LLMs has shown significant progress in reducing the developer workload on security fixes by automating patch generation for code vulnerabilities​​. 

He explained that developing in-house AI involves higher initial costs due to infrastructure, talent acquisition, and maintenance expenses. However, in the long run, SaaS costs can add up as subscription fees scale with use.

Similarly, Harneet said that SaaS is comparable to an EMI rather than a one-time payment. He said, “While the upfront cost of in-house solutions may be 10-15 times higher over two to three years, the ROI (return on investment) will ultimately be positive.”

“The reality is that there’s no universal solution. The choice between in-house AI development and SaaS adoption depends heavily on an organisation’s specific situation, goals, and resources,” said Pradeep Sanyal, AI and data leader at a global tech consulting company. 

Sanyal added that, when it comes to software development, AI can handle significant advancements in the workload. He pointed out that AI excels at automating repetitive tasks, suggesting code snippets, and assisting with basic debugging. 

“In-house AI solutions can be scalable if they are well-architected. However, many AI solutions fail in production because they were initially built as proof-of-concept projects that didn’t account for the demands of production-scale environments. SaaS offerings, designed for enterprise requirements, may offer better scalability in many cases as they are thoroughly tested across various workloads,” said Pavan Nanjundaiah, head of Tredence’s studio innovation team.

Rise of Vertical SaaS

Harneet said AI has the capability to solve very niche problems. “The companies that focus on niche problems and solving them…will be really successful,” he said.

Along similar lines, A16z recently published a blog which said AI is unlocking a new era for vertical SaaS. In functions like marketing, sales, customer service, and finance, AI will augment, automate, or, in some cases, replace many of the rote tasks currently performed by people, allowing VSaaS companies to offer even more with their software. 

“The early winners in LLM-based solutions might just be general-purpose platforms. Over time, vertical AI agents will emerge. It’s like how, in the box software world, the early vendors were just trying to convince people to use software…As the market matures, it will get more sophisticated, and vertical solutions will become dominant players,” said Jared Friedman, group partner at Y Combinator, in a recent podcast with YC president Gary Tan while discussing the future of SaaS. 

Harneet believes that in the era of AI, SaaS will become a sidekick. “It will be an enabler, but SaaS is not the main focus. In the internet world, SaaS was a game because the network was king, but in the AI era, the solution is king.”

Notably, all SaaS companies, including Salesforce and Oracle, are stepping up efforts to integrate AI solutions into their offerings. At Cloudworld 2024, Oracle announced that over 50 AI agents within its Fusion Cloud Applications Suite would automate a number of tasks that will help streamline business processes, deliver personalised insights, and boost productivity across various functions, including finance, supply chain, HR, and sales, among other tasks. 

Similarly, at Salesforce’s biggest tech summit, Dreamforce 2024, the company unveiled Agentforce Partner Network, which brings together tech giants such as AWS, Google Cloud, IBM, and Workday to enhance the AI-powered Agentforce platform’s capabilities.

It would be naive to declare SaaS dead. Rather, existing SaaS companies are evolving into AI-first entities. “Legacy and new SaaS companies will truly become AI-first (not just marketing), abstract away the complexity of deploying LLMs,” said Matt Turck, VC at First Mark Cap, adding that Artificial Intelligence as a Service (AIaaS) has become the new SaaS.

SaaS companies such as Zoho, Freshworks, CleverTap, and Atlassian have added GenAI capabilities to their existing solutions. Meanwhile, numerous AI startups are developing new products based on these generative AI technologies. According to AIM, approximately 60 AI startups in India are building products using generative AI.

AIM got in touch with Priya Subramani, VP and GM of customer experience products at Freshworks, who said, “My view is that you should use your technology where it’s core to your business. For anything else, like customer service or other functions, you can adopt best practices from industry leaders.”

On the other hand, NVIDIA chief Jensen Huang believes that SaaS is sitting on a goldmine. “These platforms are sitting on a gold mine. There’s going to be a flourishing of agents specialised in Salesforce, SAP, and other platforms.” 

Every AI startup that is not engaged in core research effectively becomes a SaaS company. For instance, several companies are developing AI-powered conversational platforms for customer care, such as Exotel, Freshworks, Gupshup, CoRover.ai, LimeChat and Yellow.ai.  

However, not everyone believes the same. “Most SaaS companies rebranding themselves with AI are barely adding a limited chat functionality where users can ask a limited set of predefined questions and get directed to the dashboard for answers. There’s no AI here, just a bad UX that delivers little to no value to the end customer,” said Divyaanshu Makkar, co-founder of WizCommerce. 

Companies like Ema and Alchemyst AI are working on developing  ‘AI employees’ for businesses. In a recent blog titled ‘Why SaaS is Dead and the Future is Agentic’, Ema explains how Agentic AI overcomes the limitations of traditional SaaS. These AI agents can manage entire tasks on their own, make decisions, plan, and improve their performance based on feedback, similar to how humans learn and adapt over time.

Hybrid Approach 

According to Sanyal, while the decision to choose between in-house AI and SaaS is complex, most enterprises are gravitating toward a hybrid model. “Companies are using SaaS to initiate quickly and fill gaps while building in-house capabilities for their most critical, differentiating AI needs. This pragmatic approach balances speed, cost, control, and long-term strategic value,” he said.

Echoing similar sentiments, Harneet said that SaaS is a proven model that will not disappear completely and will remain relevant for certain use cases. However, he added that enterprises focused on building core generative AI applications will prefer to develop their own solutions.

“B2B SaaS companies, which are taking a lot of data from businesses, will have a gloomy future,” he claimed.

Building in-house AI solutions also comes with its own challenges. “Building an in-house AI stack can take several weeks to a few months. Initial development may take anywhere from two to four weeks for a basic model, while fine-tuning, testing, and full deployment could add another six to 12 weeks. If rapid deployment is essential, a SaaS solution can be a faster option,” Sharma added.

Harneet explained that not every solution needs to be built in-house. “There are certain areas that enterprises or individuals should not attempt to build in-house, especially those that are not their core expertise.”

“For example, if I am not a finance company but an AI company, I might need a tool to automate the reconciliation of my finances. In that case, I can probably outsource that tool,” he concluded.