AI and Big Tech - Newspaper Summary

 The sources indicate that in October 2025, Artificial Intelligence (AI) and Big Tech are at the epicenter of global business, characterized by massive infrastructure investments, intense competition for dominance (the "AI arms race"), and escalating regulatory scrutiny, particularly in India, regarding competition and digital sovereignty.

Here is a comprehensive discussion of what the sources say about AI and Big Tech, encompassing global developments and India's economic context:

I. The Global AI Arms Race and Big Tech Dominance

The narrative in October 2025 is dominated by the competitive push among major global technology firms, led by OpenAI and Elon Musk's xAI, to secure the necessary computing infrastructure to develop advanced AI models.

1. Massive Infrastructure Deals and Nvidia's Role

The race for "superintelligence" demands unprecedented levels of computing power, leading to massive deals for AI chips and data centers.

• OpenAI's Strategic Deals: OpenAI is actively engaging in a dealmaking frenzy, often using "creative financing structures" to secure computing capacity.
  • OpenAI and AMD Partnership: OpenAI and Advanced Micro Devices (AMD) announced a multibillion-dollar partnership to collaborate on AI data centers utilizing AMD processors, posing one of the most direct challenges to market leader Nvidia. OpenAI committed to purchasing 6 gigawatts worth of AMD’s MI450 chips, a deal expected to generate tens of billions of dollars in new revenue for AMD over the next half-decade. This is seen as a clear validation of AMD's technology roadmap.
  • Nvidia and Oracle Commitments: OpenAI is also slated to receive a $100 billion investment from Nvidia over the next decade, funds that OpenAI plans to use to purchase Nvidia chips and deploy up to 10 gigawatts of computing power. Furthermore, OpenAI recently signed a $300 billion megadeal with Oracle to purchase 4.5 gigawatts of cloud computing power over five years.
• The Cost of the AI Race: This intense investment is leading to concerns that a bubble is building in AI infrastructure, with companies like OpenAI, Meta, Alphabet, and Microsoft spending amounts that "dwarf the largest build-outs in history". OpenAI, for example, is projected to spend around $16 billion this year just on renting computing servers, a figure that could rise to $400 billion by 2029.
• Nvidia’s Dominance: Despite new rivals, Nvidia still controls over 70% of the market for AI chips. Its most powerful AI data center chips can cost $60,000 each.

2. Elon Musk’s xAI and the Catch-Up Effort

Elon Musk’s xAI is aggressively attempting to catch up with rivals like OpenAI.

• Colossus Supercomputers: xAI has established a massive data center in Memphis, Tennessee, called "Colossus," which houses over 200,000 Nvidia chips and powers the Grok chatbot. Musk is currently nearing completion of Colossus 2, an even larger facility.
• Infrastructure Costs and Challenges: The completion of Colossus 2 is expected to cost tens of billions of dollars. Musk needs to spend at least $18 billion for the roughly 300,000 more chips required for the Memphis project. To address immediate power needs, xAI utilized natural-gas turbines as a temporary power source, a move that stirred controversy due to pollution and permitting concerns in South Memphis. xAI's operation will also consume "millions of gallons of water a day" and more electricity than is needed for all city homes, despite bringing in only a few hundred jobs.

3. New AI Products and Societal Backlash

Big Tech is rapidly deploying new consumer-facing AI products, often triggering ethical and social debates.

• OpenAI’s Sora: OpenAI launched Sora, an AI video generation tool marketed as the "AI version of TikTok". Sora allows users to generate realistic, personalized videos from text prompts.
  • Criticism and Incentives: The launch drew immediate backlash, criticizing OpenAI for releasing a "trough for AI slop" instead of focusing on its stated noble goals. Critics argue that Sora is designed to be addictive, like social media, to drive ad revenue and usage, rather than genuinely spur creativity.
  • Ethical Concerns: Sora raises significant ethical issues regarding generating realistic videos of people committing crimes or creating likenesses of others without proper consent. The backlash reflects a growing public skepticism and awareness, especially among young people, about AI being plugged into their lives, fueled by the negative shadow cast by social media.

II. AI and Technology in the Indian Context

In India, the discussion revolves around regulating the evolving digital landscape, fostering domestic AI capability, and integrating technology across key financial and manufacturing sectors.

1. Regulatory Focus on Competition and Digital Sovereignty

The Competition Commission of India (CCI) is actively addressing the potential for AI to entrench monopolies, while experts stress the need for "Digital Sovereignty".

• AI and Market Dominance: The CCI released a market study on 'Artificial Intelligence and Competition,' warning that AI adoption, while a growth driver, risks tightening the hold of a few dominant digital firms.
  • The core resource for AI—vast, high-quality datasets—is concentrated in the hands of a few global firms, creating "data monopolies".
  • The CCI flagged risks from algorithmic pricing tools that might resemble collusion, and self-preferencing by large platforms using AI-driven ranking systems.
• Proposed Solutions: The CCI is setting up a think-tank, strengthening technical capacity, and promoting coordination with other regulators. It proposed that businesses conduct self-audits of their AI systems for fair-trade compliance. Transparency in algorithmic decisions and fair data-sharing frameworks are deemed necessary to help smaller firms compete.
• Digital Sovereignty: Experts argue that strengthening indigenous capabilities in cloud services, AI, and cybersecurity is no longer optional but a necessity for India's economy and security, as dependence on foreign (especially US) technology poses disruption vulnerabilities.

2. AI Adoption and Capability Building in India

India is making concrete strides in utilizing AI, particularly at the state level and within the financial sector.

• AI for Government and Industry: The Uttar Pradesh government aims to establish the state as a global hub for Artificial Intelligence (AI) and deep technology by 2047 under the "Viksit UP-2047" initiative. This includes plans for developing AI-focused cities in Lucknow and Kanpur.
• Domestic AI Research (Fractal Analytics): Fractal Analytics, selected under the Central government’s IndiaAI Mission, is focusing its efforts on developing advanced reasoning models (AI systems that can analyze, process, and create new information) for math, STEM fields, and medical/healthcare data. This research aims to capture local nuances and ensure that model development is done indigenously, addressing concerns about AI sovereignty.
• Fintech and AI: Fintech unicorn Raise Financial Services, which runs the stock trading platform Dhan, plans to use its new $120 million funding round to strengthen its technology and AI capabilities. Raise currently uses Fuzz, an AI model trained on large-scale financial data sets to deliver contextual insights for Indian investors.

3. Big Tech Regulation (Digital Platforms and E-commerce)

Beyond AI, the government is moving to standardize the operating rules for major digital platforms in India.

• Standardizing Digital Platforms: Online aggregators such as Uber, Swiggy, Amazon, and Airbnb may soon face uniform standards set by the Bureau of Indian Standards (BIS) to govern how they sign up, assess, and retain partners (drivers, delivery workers, vendors). This regulatory move aims to standardize partner treatment and ensure consistent consumer service quality across India's rapidly growing digital platform economy. The BIS is developing an Indian standard on this subject, recognizing the complexity of this ecosystem.

4. The IT Sector and Macro Headwinds

India's IT sector, a key technology employer, faces multiple global uncertainties.

• Major Deal Wins: Despite macroeconomic uncertainty, India’s sixth-largest software services exporter, LTIMindtree, won its largest-ever deal, pegged at $580 million, with a leading global media and entertainment company.
• Global Headwinds: The sector faces risks from trade tariffs and stricter US immigration policies, such as President Trump’s stricter H-1B visa norms and sharply higher application fees, which raise costs and restrict the mobility of Indian professionals. This regulatory friction contributes to slower deal conversions and margin pressures for Indian IT firms.

III. Big Tech Influence on Consumer Electronics and Manufacturing

Big Tech influences extend into India's consumer goods and manufacturing aspirations, notably through supply chain shifts and funding.

• Smartphone Ecosystem: Strong demand for AI chips drove Hon Hai Precision Industry (Foxconn) revenue up 11% year-on-year in the September quarter. India is emerging as a critical manufacturing hub, with the Yamuna Expressway corridor in Uttar Pradesh attracting significant investments, including a semiconductor plant by the HCL-Foxconn joint venture.
• E-commerce and Retail: Flipkart Investments divested a 6% stake in Aditya Birla Lifestyle Brands, with major financial players like Goldman Sachs and Morgan Stanley participating in the open market transactions. Additionally, e-commerce giants like Amazon and Flipkart continue to dominate festive sales events in urban India.
• Domestic Tech Brands: IPO-bound wearables brand boAt (Imagine Marketing) returned to profitability in FY25, driven by product innovation and cost control. The company strengthened its audio segment and wearables business by focusing on a software-led ecosystem approach and increasing domestic manufacturing to over 70% of volumes. Quick commerce has emerged as an important growth driver for boAt, alongside e-commerce.