In a surprising yet strategic move, India has signaled an openness to Chinese artificial intelligence (AI) technology by approving the hosting of DeepSeek’s large language models on domestic servers. This development marks a rare exception to India’s stringent restrictions on Chinese digital services and underscores the country’s growing ambition to establish itself as a major player in AI.
India Recognizes DeepSeek’s Potential
During an industry conference on Thursday, India’s IT Minister, Ashwini Vaishnaw, commended DeepSeek’s rapid progress and cost-efficient approach to AI development. “You have seen what DeepSeek has done — $5.5 million and a very, very powerful model,” Vaishnaw remarked, addressing concerns over India’s relatively modest investments in AI compared to global counterparts.
DeepSeek has garnered significant attention with its recent AI breakthrough, particularly its R1 “reasoning” model, which has challenged the status quo of high-cost AI development. The model’s emergence has even impacted major tech players, contributing to a staggering $600 billion dip in Nvidia’s market valuation.
A Rare Opening for Chinese Tech in India
Since 2020, India has taken a hard stance against Chinese digital platforms, banning over 300 apps, including TikTok and WeChat, due to national security concerns. However, the decision to allow DeepSeek to operate within the country comes with strict conditions. The AI models must be hosted on Indian servers and comply with the nation’s data localization policies, ensuring that all data from Indian users remains within domestic borders.
“Data privacy issues regarding DeepSeek can be addressed by hosting open-source models on Indian servers,” Vaishnaw assured industry leaders. This requirement aligns with India’s broader strategy to maintain sovereignty over its digital ecosystem while capitalizing on advanced AI technologies.
India’s AI Compute Facility: A Game-Changer
DeepSeek’s models are expected to be hosted on India’s newly launched AI Compute Facility, a state-of-the-art infrastructure designed to accelerate the country’s AI ambitions. The facility boasts an impressive 18,693 graphics processing units (GPUs), nearly double the initial target. This includes:
- 13,000 Nvidia H100 GPUs
- 1,500 Nvidia H200 GPUs
- 10,000 GPUs ready for immediate deployment
Operations at the facility are set to commence in the coming days, and the government has announced significant incentives to encourage domestic AI development. AI computing services will be offered at competitive discounts:
- 42% discount on standard AI computing
- 47% discount on high-precision computing
This pricing strategy is expected to attract startups, researchers, and enterprises seeking cost-effective AI solutions, reducing dependency on foreign AI computing infrastructure.
DeepSeek Under Global Scrutiny
While India is embracing DeepSeek’s AI capabilities, the company is facing mounting scrutiny on the global stage. Just a day before Vaishnaw’s announcement, DeepSeek’s app was removed from Apple’s and Google’s app stores in Italy. The Italian data protection authority has raised concerns over how the Chinese firm collects and processes personal data, reflecting broader anxieties about AI ethics and security.
Beyond data privacy, DeepSeek’s rapid rise has sparked debates around:
- Copyright issues – Questions persist over the training data used for DeepSeek’s models.
- U.S. export controls – Tighter regulations may impact DeepSeek’s ability to procure advanced AI chips.
- Global AI investment – The disruptive nature of DeepSeek’s low-budget, high-performance model has intensified discussions about the future of AI funding.
India’s AI Vision: Building Domestic Capabilities
Even as India welcomes foreign AI models, the government is equally focused on nurturing its indigenous AI ecosystem. Vaishnaw emphasized that major chip designers are actively collaborating with India to develop homegrown GPUs. Additionally, the country anticipates a $30 billion investment in hyperscale computing and data centers over the next two to three years.
One of the most ambitious projects in this space is Reliance’s planned 3-gigawatt data center in Jamnagar, which could become the world’s largest. Such infrastructure investments are poised to position India as a global AI powerhouse.
Accelerating AI Innovation in India
Recognizing the need for a robust AI ecosystem, India is fast-tracking AI model development. According to Vaishnaw, at least six major developers could launch AI models within four to eight months. A unified compute facility will serve as a backbone for these initiatives, providing the necessary computational power and resources.
Additionally, India is prioritizing AI-driven applications in key sectors. Eighteen AI projects focusing on agriculture, climate change, and learning disabilities have been selected for initial funding, reflecting the government’s commitment to using AI for societal benefit.
To ensure responsible AI development, India is also establishing a regulatory body under a hub-and-spoke model. This framework will facilitate collaboration between institutions to create robust safety and governance measures. “We will be keeping our models open and application-focused,” Vaishnaw stated, underscoring the need for transparency and ethical AI practices.
Conclusion
India’s decision to host DeepSeek’s AI models marks a pivotal moment in the country’s AI journey. While maintaining stringent data localization policies, India is leveraging foreign AI advancements to strengthen its own capabilities. With significant investments in compute infrastructure, indigenous AI models, and regulatory frameworks, India is positioning itself as a formidable player in the global AI race.
As DeepSeek continues to shake up the AI landscape, its collaboration with India could set a precedent for future partnerships between nations in the evolving field of artificial intelligence. Whether this marks the beginning of a more open stance towards Chinese technology or remains a rare exception will depend on how effectively India navigates the complex dynamics of AI regulation, security, and innovation.
