Why India Struggles to Build an Nvidia or a DeepSeek?

 

Indian IT companies are under age age-old influence of old traditional thought process, where we will supply only cheap labour for an astronomical profit generation business model. The biggest question as of date is why Indian companies are not building things like Nvidia or a DeepSeek? Why has India, despite its vast talent pool, not yet produced an Nvidia or a DeepSeek? Now every investment cannot be done by the government alone, where the taxpayers' funds will be deployed, while corporates will enjoy the fruits of dividends and valuations. India needs a new thought process behind the upcoming IT industry growth and competition created by the global architecture.

A country like China, which is already a manufacturing hub for the global economy, has also emerged with a breakthrough large language model. It was hailed as the country’s “Sputnik moment through China’s DeepSeek,” symbolising a leap forward in artificial intelligence. Similarly, Nvidia’s dominance in advanced chipmaking reflects how innovation ecosystems in the US and China are producing global technology giants. This raises a crucial question:

India has long prided itself on its engineering talent. Many of the top minds at Nvidia, Google, Microsoft, and leading AI start-ups are Indians, often trained at prestigious institutions such as the IITs, MIT, or Carnegie Mellon. Yet, the irony is that this talent flourishes abroad rather than within India. The phenomenon of brain drain—where India’s brightest leave for better-funded research environments and entrepreneurial ecosystems—remains one of the biggest hurdles in building homegrown giants.

 The Key  Barriers to Innovation

 Lack of Risk Capital

Unlike China and the US, where venture capital flows freely into early-stage, high-risk projects, India still suffers from a scarcity of funding for deep-tech ventures. Start-ups often struggle to raise capital beyond consumer-facing or IT services models, leaving hardware and semiconductor innovation underfunded.

 Weak University-Industry Linkages

Leading Indian universities have produced world-class graduates but have fallen short in commercialising research. In contrast, ecosystems in Silicon Valley and Beijing thrive on collaboration between academia, start-ups, and industry. India’s research institutions often remain isolated, with limited incentives to convert innovation into scalable businesses. The biggest gap in the Indian education system.

 We don’t lack Talent but only Policy

A significant proportion of India’s top computer science graduates migrate abroad. Without sufficient local opportunities, the best and brightest end up driving innovation for foreign companies. At the same time, restrictive immigration policies in the US have occasionally slowed this flow, but India has yet to fully seize the opportunity to retain this talent.

 India’s corporate environment has historically been dominated by traders, distributors, and service providers, rather than product innovators.  We are not spending much on R&D as compared to what China and the U.S are spending. This has created a culture of risk aversion, where scaling established business models is preferred over pursuing breakthrough innovation. As a result, India has built global IT service companies but not product-centric technology giants. China has aggressively invested in semiconductors, renewable energy, and electric vehicles, backed by state capital and industrial policy. The government not only funds start-ups but also ensures they are embedded in a wider innovation ecosystem. By contrast, Indian entrepreneurs often note that their government does not provide meaningful financial support for risky start-up ventures, limiting the ability to build globally competitive firms.

Despite these limitations, India is making strides. Venture capital investments in India grew from $9.6 billion in 2013 to $13.7 billion in 2023, positioning the country as Asia-Pacific’s second-largest market for start-ups. Growth in consumer technology, fintech, and AI-driven businesses shows promise. Moreover, with the rise of generative AI and the digital economy, India has an opportunity to pivot towards deeper forms of innovation.

Conclusion

India has the talent, the scale, and the ambition to produce global technology giants. But what we lack is investments and a mindset change by the big companies of India.

What it lacks is a supportive ecosystem that nurtures high-risk innovation, retains talent, and bridges the gap between research and commercialisation. With structural reforms and bold policy support, India can aspire not just to be a hub for IT services but also a birthplace for the next Nvidia or DeepSeek. The foundation is strong—what is needed now is vision, investment, and the courage to innovate.