India making same mistake with AI that it made with Dot Com, China trying to be creator and not user

India Today

2 days ago

When we look at the tech landscape in China and India, there is one fact that jumps out immediately: Indians are users whereas Chinese are creators. In other words, over here in India most of the tech tools that we use, whether it is a search engine or the device on which we are accessing the search engine, is made by a company that is not Indian. In China, in contrast, most of the tech tools and services used by people there have been created by Chinese companies. advertisementThis remains apparent even though of late there has been some change. In the last 10 odd years a lot has changed for the better. The data centres and server farms that power many global services like Gmail, YouTube and Microsoft Office 365 are now located in India. Similarly, a lot of phones sold in India by companies, which have their headquarters outside India, are now assembled in India. Yet, India made certain 'mistakes' — or rather choices — in the late 1990s and early 2000s which made India a user and not a creator. When it comes to AI, it seems the country is making the same choices.This is in contrast to the Chinese approach. China, yet again after following the same rulebook during the Dot Com era, is forging ahead with its plans to be a creator for the AI era. advertisement
The differing approaches are already visible in the way people of both countries use AI. Just a few days ago a report by a company called Bond, a report bylined by famed tech analyst Mary Meeker, highlighted that Indians were the biggest users of ChatGPT in the world. Of all monthly active users of ChatGPT, Indians are around 14 per cent. In contrast, China doesn't even find a space in the Top 10 countries ranked on the basis of ChatGPT. So, what is Chinese using? Chinese are using DeepSeek. Almost 33 per cent of Chinese AI users utilise DeepSeek. And I have suspicion that the rest use AI models like Qwen and Ernie, which too have been developed by Chinese tech companies locally. It is as if we are going through deja vu. The journey India had during the Dot Com era, when it simply adopted and used technologies created by American companies, is getting repeated in the early days of the AI era. The results might end up being the same, that is Indians may end up being rent-payers instead of owners or rent-seekers. In the early days of the Dot Com boom, China moved fast to not only discourage its people from using tech and tools created by foreign companies, but it also invested heavily in creating similar tools and technologies within the country. The idea was not to use tech. The idea was simple: tech is powerful and we want to not just use it but also own it. China created an ecosystem where it was able to replicate tools like WhatsApp, Google and Microsoft. Its home-grown apps and services matched the best offered by global companies. The result was that China's tech boom did not benefit Silicon Valley. Instead, it benefited China. Now that AI is the next big thing, China is again hoping to recreate what it achieved with Dot Com. In fact, this time around, China has bigger ambitions. Its companies are not just creating world-class AI models like DeepSeek R1 — its latest update makes it as good as ChatGPT o3 and Google Gemini 2.5 Pro — but they are also hoping to spread them wider in the world. This is the reason why even as American AI companies chase early profits and closed models, the Chinese companies from Alibaba, which has Qwen, to DeepSeek are open-sourcing their technology and AI methods. In contrast, India again seems happy to be a mere user and early adopter. Being a user and early adopter has its benefits — India's IT industry would not have been possible if India had shunned global tech companies in late 1990s — but it has its disadvantages as well. It forces a country into a rent-paying agreement with the global giants. India of 2025 is not the India of the 1990s. As a country we should be dreaming bigger and thinking more strategically. As a country we should be investing more in emerging technologies like AI and thinking of creating an ecosystem that can help Indian companies make world-class AI tools. It is possible that the endeavour might not succeed. It may lead to nothing and we may remain the users and not turn into creators. But it is also worth trying. Because repeating the choices made during the Dot Com era will lead to the same outcomes, the kind of outcomes that we may in 10 or 15 years from now will not like.