- US suspension of Anthropic models sparked India’s AI debate.
- Indian leaders advocate building domestic AI, reducing foreign reliance.
- Calls for massive investment in open-source AI and semiconductors.
The US government’s decision to suspend access to Anthropic’s Fable 5 and Mythos 5 models has set off a sharp debate across India’s technology and investment community. Leaders across sectors are now calling for the country to build its own artificial intelligence capabilities rather than depend on foreign platforms.
The episode has been widely described as a wake-up call, with founders, fund managers and venture capitalists arguing that India’s reliance on external AI infrastructure poses a long-term risk to its economic and strategic interests. The conversation has quickly moved beyond access issues to questions of national sovereignty and technology policy.
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In a report by The Economic Times, Zoho Corp founder Sridhar Vembu said the development made clear how central technology has become to national power. “Technology is the ultimate weapon. National sovereignty, national security, all of it is now about technology,” he said, adding that “globalisation is dead and Bharat must find her own way ahead.”
Vembu called for India to focus on smaller, open-source models and strengthen domestic research, citing limited access to high-end GPUs and the capital needed for frontier model development.
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Mohandas Pai, chairman at Aarin Capital, urged the government to act at scale, proposing an annual fund of 50,000 crore rupees for deep tech and AI. Siddarth Pai, founding partner at 3one4 Capital, said: “We need to invest in semiconductor design and work on building open source models.”
Hemant Mohapatra, partner at Lightspeed Venture Partners, said the moment for sovereign AI has arrived. “The ‘sovereign AI is real’ moment is here. Nation-states will soon start needing citizenship and/or security clearances to work on the next SOTA models the way they do for defence, space, nuclear tech,” he said, warning that “talent wars here will be crazy.”
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Paytm founder and CEO Vijay Shekhar Sharma called the move “understandable” but raised questions about alternatives, asking: “Do you think open source models will reach this level of sophistication?”
Sumit Gupta, co-founder of CoinDCX, described it as a national concern. “This should disturb every Indian founder, investor and policymaker,” he wrote, adding that “frontier AI is the new superpower.” He warned that if India does not build its own foundational models, “we pay rent on the intelligence layer of our own economy for decades.”
Nischal Shetty, co-founder of WazirX, said the development points to a shift toward concentrated control. “A few large institutions control work output across the world due to AI,” he wrote, calling for open models and “localised on-device AI” to prevail.
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Harsh Gupta Madhusudan, fund manager at Ionic Wealth, drew a comparison with China’s technology strategy, arguing that “import substitution is always the first step towards export promotion.” He wrote: “We need our own frontier models, the killing of Claude Fable for foreigners by Anthropic should show us what is in store.”
Investor Sandeep Mall said the episode exposed a deeper structural problem. “Tools we depend on can be switched off overnight, by a government we have no vote in,” he said, calling for investment in foundational AI models rather than services built on external platforms.
Malay Krishna, director of product management at Vyapar, described the shift as one in how advanced AI is governed. “The most powerful AI is now being treated like advanced chips. A controlled export,” he wrote. He warned of a “two-tier AI world” where “US persons get the top tier, the rest of us get the model one notch below,” urging developers to treat model access as a supply chain risk.
The Economic Times also spoke to global voices on the matter. AI commentator Matthew Berman said the situation was “self-inflicted” and “would have never happened if Anthropic didn’t make such a big deal about Mythos being dangerous.” Matt Shumer, CEO of OthersideAI, pointed to the productivity stakes, saying: “What can be done in 100 hours with Opus can be done in 1 with Fable.”
