- January 31, 2025
India’s geo-strategic playbook: Is there a coherent policy in place?

Marc Andreessen, founder of venture capital firm Andreessen Horowitz and respected Silicon Valley guru (he co-founded Netscape and co-authored Mosaic, the first web browser with a graphic user interface), has termed the launch of a new AI model DeepSeek by a hitherto unknown Chinese company a couple of days ago as a “Sputnik moment” for the West.
With good reason. When the former Soviet Union launched the first ever artificial satellite into space in 1957, the West realised with a shock that the Soviets had not only managed to rebuild after the devastation of World War II, but had actually overtaken the United States in space technology and capability.
In fact, the Soviet Union followed up Sputnik with a series of devastating firsts – the first to send a living creature into space, the first to send a man into space and later the first woman as well. A rattled US doubled down on its space programme and took the ambitious decision to land man on the moon. The rest, as they say, is history.
Something similar is happening in the megabucks world of AI. When DeepSeek released its AI assistant, developed at a fraction of the cost of generative AI models such as ChatGPT, Google’s Gemini and Microsoft’s Copilot, using a fraction of the energy, and running on markedly cheaper and widely available gaming graphic processor units, it simply devastated the markets. Chipmaker Nvidia, which had so far dominated the market for advanced AI chips, lost its crown as the most valuable US company, and a staggering $600 billion in market cap, in a single day.
Shares of other big tech companies like Alphabet, Meta and OpenAi also crashed, as did the stock of other Western semiconductor manufacturers. In Japan, shares of technology fund Softbank Group tanked almost 10 per cent. Softbank had, just a few days earlier, announced that it will be supporting a private sector initiative by Oracle and OpenAI and Softbank to fund up to $500 billion for AI research (Softbank coughed up $19 billion as a first step) called Stargate, which US President Donald Trump had announced with much fanfare just last Wednesday.
DeepSeek’s release did two things. It demolished the notion that large language models were difficult to build and insanely expensive to train. By also making its product open source, it allowed developers around the world to use its model and build on it – demolishing at a stroke the hegemony of US Big Tech. Ironically, American companies themselves had demonstrated the value of open source in driving innovation and developing new markets. IBM did it with its PC standards. Mozilla Firefox did it for browsers. And Google did it with Android. But that history was forgotten in the AI space as money flowed in and tech stocks soared to dizzying heights – till DeepSeek hoisted Big Tech on its own petard.
The aftershocks of the DeepSeek quake are yet to die down and it is a foregone conclusion that the AI industry – and AI power equations – will be fundamentally changed going forward. This would have profound impacts on not only financial markets, but increase geopolitical tensions, as the US, which under Trump has openly declared its intention to be the world’s leading technology superpower, responds to this challenge.
That is because there is a nagging question underlying the DeepSeek affair which is yet to be answered – what if DeepSeek’s release as open source was part of a strategic, long term plan by China to counter the US’s technological hegemony? If it was, it was a strategic masterstroke. At one stroke, it rocked the supremacy of US tech companies, while demonstrating that it was possible to work around both US sanctions and tariffs, thus weakening the US’s ability to dictate non-military terms (it is still the world’s military superpower) to the rest of the world. And open source means that the US-China battle in the AI space has suddenly become a multi-front war.
These are questions that CEOs and Boards will have to grapple with as they come up with a strategy to deal with a suddenly more fragmented and multi-polar world. COVID and its aftermath had already woken up to the need for supply chain resilience and geographic diversification. Rapid changes in the policy scenario – Trump’s threat of tariffs against anyone and everyone, EU sanctions on Russia post Ukraine etc—have added another layer of uncertainty to future planning for organisations.
The question is, how prepared is India Inc to deal with such situations? Without a clear geostrategic policy in place, it faces the risk of market access disruption, financial losses through sanctions and tariffs, heightened instability in operations (for instance, what is the plan B for Indian tech companies if Trump starts sending hordes of techies back?) and compliance headaches.
In fact, in its Global Geostrategic Outlook for 2025, EY recommends the building in of geopolitical strategies and considerations into existing business models as the number one priority for companies worldwide. It has also underlined the need to build greater supply chain resilience and adopting sustainability strategies to “geopolitical realities” as urgent priorities.
The question is: does India Inc have such a plan in place?
Authored by a senior journalist, R Srinivasan.
Views are personal and do not represent the stand of this publication.