Stanford economist Susan Athey says that global AI models often fall short when it comes to adapting to local needs, and this gap creates a significant opportunity for countries like India. She explains that while many leading AI systems are designed as broad, general‑purpose tools, they frequently do not cater effectively to specific languages, cultural contexts, local services, and regional data realities. Because global providers don’t always tailor their models deeply enough, there’s room for local innovation that better meets the needs of diverse users.
Athey emphasizes that AI is more than a consumer product; it’s a technology that must be deeply integrated with real‑world systems like government services, healthcare, infrastructure, and business operations to deliver value. In doing so, she argues, local players have a strategic advantage because they can work closely with implementing partners to tailor solutions that fit India’s unique challenges. This bespoke implementation — from language support to nuanced service features — is where domestic firms can differentiate themselves.
Beyond customisation, Athey raises concerns about emerging economies becoming overly dependent on foreign AI providers, especially if they lack local control over critical systems. She suggests that for mission‑critical applications — such as payment systems, public infrastructure, and essential services — nations need some degree of autonomy and leverage. Without it, they risk being vulnerable to external changes in pricing, access, or availability of technology.
Athey also touches on the regulatory landscape, noting that thoughtful policies can balance the needs of startups with protections for traditional industries like news and publishing. She cautions that privacy and copyright laws must be carefully designed so they do not inadvertently favor large incumbents or stifle emerging innovators. With the right mix of customisation, local involvement, and balanced regulation, India could strengthen its position in the global AI ecosystem.
