Investment research firm Bernstein warned Thursday that India faces a "strategic tech crisis" as US technology giants deploy predatory pricing strategies to lock up the Indian AI market. Perplexity Pro launched free for one year to Airtel's 350 million subscribers while OpenAI introduced a $5 monthly India subscription compared to $20 in the United States.

Bernstein analysts described regulatory "double standards" where foreign tech companies receive favorable treatment while domestic companies face what the firm called "crushing rules and government-led 'tech stacks' that make private business unviable." Private AI investment in India totaled $11.29 billion between 2013 and 2024 compared to $471 billion in the United States and $119 billion in China. From the report: When OpenAI, which is reportedly looking to set up a data center in India, announced the plans to launch a new office, it was met with another round of excitement -- "as if Open AI will hire all Indians at hefty salaries," the firm wrote in a note to clients Thursday. Bernstein analysts pour cold water on this excitement, dismissing it as a "repeat of the 90s" and arguing that the hype misses the fundamental power imbalance.

"Anyone, we repeat anyone, can build a data center... This is the start of the dominance of US tech in Indian AI environment ensuring Indian entrepreneurs do not get a fighting chance to stay relevant. They will run on the sidelines - piggybacking on the US foundation models or maybe even the Chinese," they wrote.

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