India’s fast-growing startup ecosystem, though thriving in scale and diversity, is facing critical warnings from global technology leaders. At the ET Soonicorns Summit 2025, experts including Jonathan Ross, CEO of Groq, and collaborators from the Massachusetts Institute of Technology (MIT), raised concerns that India is lagging behind the United States and China in foundational technologies—particularly in artificial intelligence (AI).
They emphasized that the lack of urgency among Indian startups to invest deeply in advanced tech infrastructure could slow the nation’s innovation trajectory.
The Growing Gap in Foundational Technologies
Foundational technologies refer to core advancements such as:
- Semiconductors
- AI infrastructure
- Quantum computing
- Deep learning frameworks
These power future innovation. While India has excelled in building application-driven startups—especially in fintech, e-commerce, and SaaS—experts argue the country has not made significant progress in these base-level innovations.
Jonathan Ross highlighted how the US and China are advancing aggressively in chip manufacturing, AI hardware optimization, and large-scale model development. In contrast, India remains heavily reliant on imports and lacks a clear national strategy to compete. Without rapid progress, Ross warned, India risks being confined to the role of a consumer market rather than a global technology leader.
Why Foundational Tech Matters
Foundational technologies are not just enablers but strategic assets. Countries investing in advanced semiconductors, AI accelerators, and next-gen computing platforms are setting the stage for dominance in industries such as:
- Defense
- Space exploration
- Healthcare
- Renewable energy
For India, which aspires to be among the world’s top three economies by the next decade, building capacity in these areas is essential.
Experts stressed that while India has an abundance of talent, much of it is directed toward service-based work or incremental innovation, rather than breakthrough advancements that demand long-term investment and risk-taking.
The Role of Indian Startups
Indian startups have traditionally excelled at solving immediate market needs like digital payments, logistics, and online marketplaces. However, building foundational technology requires:
- Patient capital
- Collaboration with research institutions
- Willingness to experiment with frontier technologies
According to summit speakers, Indian startups show limited urgency due to:
- Weak R&D infrastructure
- Lack of specialized funding
- A cultural preference for safer, market-driven ventures
This has created a gap where Indian entrepreneurs are not competing at the same level as Silicon Valley or Shenzhen.
Government and Policy Interventions
Speakers also highlighted the critical role of government policies in shaping foundational tech development.
While initiatives like Digital India and Startup India AI innovation encourage digital adoption and early-stage ventures, what’s missing is a national mission for deep technology and advanced research.
Experts recommended immediate priorities such as:
- Building semiconductor fabs
- Incentivizing AI hardware innovation
- Expanding quantum computing research
Without these, India risks falling further behind in the global technology race.
A Call for Urgency
The ET Soonicorns Summit 2025 ended with a strong call for urgency. Experts urged entrepreneurs, policymakers, and investors to rethink India AI innovation approach.
Rather than focusing solely on consumer-facing apps, the country needs startups that can build core technologies to shape the next generation of global progress.
Jonathan Ross emphasized:
“The future will not be decided by application builders alone. It will be shaped by those who control the foundational layers of technology.”
Conclusion
India AI innovation stands at a critical juncture in its technological journey. Its startups have earned global recognition for rapid growth and market-driven solutions, but the absence of strong foundational tech innovation poses a long-term risk.
With global leaders sounding the alarm, the path forward requires:
- Bold investments
- Stronger R&D ecosystems
- Visionary policies
If India can channel its talent and resources toward foundational technologies, it has the potential not just to catch up—but to lead.
The time to act, experts agree, is now.
