Build Capital For AI

India needs a sovereign wealth fund (SWF) to invest in artificial intelligence (AI) and deep tech globally, and we need it now.

- HEMANT MOHAPATRA

This is not a matter of choice or preference. This is a matter of national importance and is directly correlated to India's global relevance in the coming decades.

Let's start with macroeconomics 101. We want what every growing nation wants: higher gross domestic product (GDP) and higher per-capita GDP. GDP per capita is basically a proxy for productivity and productivity has two levers: you either produce more with the same people (via automation) or you redeploy the same people to higher-value work (via specialisation).

AI is unusually good at both. That is why it is fundamentally deflationary. It lets organisations squeeze more output from the same people, and in many roles, it also raises the ceiling on what 'one good person' can do.

India's growth story has always been sold as a demographic story.

A young country, an expanding workforce, a long runway to move people from low-productivity work to higher-productivity work. It is a clean narrative that AI is about to make fragile, because AI attacks the one thing demographics give you for free: lots of human hours.

AI-based productivity gains won't come everywhere at once but are arriving fast in in some categories: software development, back-office work, basic content creation, call-centre work and so on.

StackOverflow's 2024 software developer survey with 65,000-plus respondents plotted by country and years of work experience shows that India has the sharpest and youngest peak around the two-year mark. That is exactly the band of work AI will overwhelm first: glue code, boilerplate, quality assurance, maintenance work, etc. India is exposed in a way we have not internalised yet. So, what does all this have to do with a SWF?

Capital and Labour