The report warned that if India focuses only on building applications using foreign AI models, it risks losing influence over a crucial layer of future technology
India needs to develop its own foundational artificial intelligence (AI) models to remain competitive globally and avoid dependence on foreign technology, according to a report by global brokerage Bernstein.
The report urged policymakers to prioritise domestic AI model development, warning that access to advanced AI systems could become increasingly influenced by geopolitical factors.
The brokerage pointed to recent restrictions on access to frontier AI models as an example of why countries cannot assume uninterrupted availability of cutting-edge technology. It said continued reliance on overseas AI systems could leave Indian companies working with models that are “one or two generations” behind those available in the United States and China.
Bernstein compared AI to strategic technologies such as fighter jets, nuclear energy, defence systems and semiconductors, saying advanced large language models (LLMs) are increasingly being treated as national assets rather than simple commercial software.
“AI is the next fighter jet,” the firm said, highlighting the strategic importance of controlling advanced AI capabilities.
The report warned that if India focuses only on building applications using foreign AI models, it risks losing influence over a crucial layer of future technology.
“India’s AI future cannot be built on borrowed models,” Bernstein said, adding that foundational AI systems require access to large proprietary datasets and significant computing resources.
The brokerage said India’s technology ecosystem has historically been driven by IT services rather than consumer internet platforms, which contributed to the country falling behind in developing foundational technology platforms.
However, Bernstein said India still has opportunities to create specialised AI models in key sectors by using proprietary data. It suggested that domain-specific large language models could be developed for areas such as healthcare, industrial applications and defence.
The report comes as countries worldwide compete to strengthen their AI capabilities, with governments and technology companies investing heavily in infrastructure, research and domestic innovation.
Bernstein said building homegrown AI capabilities would be important for India not only from a technology perspective but also for maintaining strategic independence in a rapidly evolving digital landscape.
