AI Should Be India’s Next UPI

“Government has no business to be in business.” But sometimes, for the greater good, government must step in. Profit drives the private sector, and they will not provide services where revenue is uncertain. Essential services, however, cannot wait for profitability. Government must ensure they reach everyone.

Some argue incentives are enough, that policy should drive initiatives. But incentives only go so far, once subsidies vanish, so do services. India cannot afford such fragility for essentials.

The biggest essential right now is AI. We do not yet have a strong Indian large language model (LLM). Our start-ups cannot match the funding and scale of US, European, or Chinese giants. If we do nothing, Indian companies will remain dangerously dependent on foreign AI platforms.

We’ve seen this movie before. Social media platforms entered India with free services. No Indian rival survived, and today all that data-driven intellectual capital and talent sits abroad. AI is headed down the same path. Global giants offer AI services at dirt-cheap prices. No VC will fund an Indian competitor against billion-dollar war chests.

Moreover, no foreign company will prioritise Indian needs. Look at payments. For years, India tried to copy the Western credit card model. Then came UPI, a homegrown solution that transformed digital payments. Would Google or Amazon ever have invented UPI?

Technology is not just business; it is weaponry. Starlink denied Ukraine satellite access. Russia was cut off from Swift. Imagine India suddenly cut off from AWS, OpenAI, or GitHub. What happens if Google Maps stops working?

AI is not like mobile networks where India leapfrogged wired connectivity. Today’s LLMs may seem limited, but they are the stepping stones to true AI. Whoever reaches it first will race ahead every single day, leaving the rest of the world permanently behind.

Critics point to the failures of government enterprises as proof the state should stay out of business. But the lesson isn’t that government has no role, rather that its role must be precise. Build what the private sector will not, create the foundations, then step back. That’s how India got banks in villages, telecom networks across the country, and later, UPI. The same clarity of purpose is now needed for AI.

Without the AI investment, India will remain a tenant in the AI age, forever paying rent.