{"slug": "the-next-ai-wave-smaller-specialised-models-are-indias-natural-strengths", "title": "The Next AI Wave: Smaller specialised models are India’s natural strengths", "summary": "India's AI strategy should focus on smaller, specialized models rather than competing with large language models (LLMs) from giants like OpenAI and Nvidia, as LLMs plateau and face criticism for high costs, energy use, and job losses. The article highlights that India's strengths lie in niche AI applications and a growing chip-making ecosystem, avoiding the hype and circular investments seen in the US AI sector.", "body_md": "# The Next AI Wave: Smaller specialised models are India’s natural strengths\n\nRTIFICIAL INTELLIGENCE (AI) has transformed the way we live and work. But a wall of resistance is building up against AI’s “Magnificent Seven”—OpenAI, Anthropic, Meta, Gemini, Xai, Microsoft and Nvidia.\n\nThe first red flag was the huge financial resources AI firms are vacuuming up. Trillions of dollars have been invested in building large language models (LLMs). A plateau has now been reached.\n\nImprovements in LLMs are slowing and incremental.\n\nThat begs the question: what about the trillion-dollar funds invested in AI giants? Was hype around AI created by AI’s foundational firms simply to draw funding? Much of the investment is circular. Consider one example. Nvidia and Microsoft invested large sums in cloud provider Core Weave. The cloud firm used the same funds, running into billions of dollars, to buy Nvidia’s GPUs. This gives external investors in AI firms the impression that AI is attracting large amounts of money when much of the money is actually round-tripping.\n\nWhat are the practical use cases from AI? Coding has been rendered obsolete. Medical diagnostics has improved dramatically. R&D across domains has become deeper and faster. All this is limited to digital use cases. What about physical cases? Smart humanoids are an obvious advance. But humanoids (as robots are now called) have been around since the 1970s. Japanese factories teem with intelligent robots that assemble passenger car parts with minimal human supervision.\n\nMaruti Suzuki’s plants in Manesar and Gurugram use over 5,000 industrial robots. Maruti’s Kharkhoda plant deploys AI-powered “Cobots” (human-aware collaborative robots) to assemble cars. Amazon has long used AI robots to sift and pack merchandise for dispatch.\n\n## The Second Life of Sanskrit\n\n10 Jul 2026 - Vol 05 | Issue 28\n\nBeing classical has become cool\n\n[Read Now The Second Life of Sanskrit](/magazine/the-second-life-of-sanskrit)\n\nA key criticism against AI firms is that they overcharge customers with token-based billing. This hugely inflates costs to customers. AI giants who havetaken billionsofdollarsfromfunders need to show revenue. But profits are a long way away.\n\nSam Altman’s pioneering OpenAI reported a loss of $38.5 billion on revenue of $13.07 billion in 2025. In other words, the ChatGPT owner’s loss was three times its revenue—some of it circular.\n\nAI’s foundational firms have also drawn criticism for the large amounts of power and water they consume. Equally serious are the errors—or hallucinations—made by AI agents. The Supreme Court intervened in a recent case involving Jammu and Kashmir Bank where the petitioner had filed AI-fabricated case law citations for legal cases that did not exist. An internal inquiry by the Supreme Court verified that the cited cases were fictitious and AI-generated.\n\nThe bigger worry for AI-firms is the opposition building up in the US, where AI is the most advanced, against job losses due to automation taking over repetitive tasks. Finance and IT companies are among the most vulnerable. The two sectors are losing an estimated 28,000 jobs every month in the US. According to Yale School of Management, “Only 19% of college graduates currently report that it is a ‘good time’ to find a quality job, down from 70% in 2022.” A Boston Consulting Group (BCG) study projects that “50%-55% of US jobs will be heavily reshaped or augmented by AI over the next two or three years.”\n\nWhere does India fit in the evolving AI universe?\n\nFive chip-making fabrication plants are set to be operationalised this year. An AI assembling, testing and design ecosystem is maturing. But with LLMs plateauing, India must not get bogged down in what amounts to reinventing the wheel.\n\nAs global entrepreneur Vivek Wadhwa wrote recently: “LLMs are also nearing the top of their exponential S-curve, the pattern every exponential technology follows as it moves from slow early progress to breathtaking acceleration and then to the painful plateau where each incremental gain costs vastly more and delivers much less.\n\n“LLMs have had their miracle phase. They stunned the world by writing essays, generating code, summarising documents, passing exams, and speaking like humans, but making them bigger is not making them wiser. They still hallucinate, make basic reasoning errors, invent facts, fail to understandtruth, causality, ethics, orconsequences, and burn astonishing amounts of hardware, electricity and capital to produce answers that often sound authoritative but are simply wrong.”\n\nWadhwa suggests that the next AI wave will come from smaller, specialised models where India has natural strengths—software talent, frugal engineering and a world-class digital ecosystem. India must leverage these.", "url": "https://wpnews.pro/news/the-next-ai-wave-smaller-specialised-models-are-indias-natural-strengths", "canonical_source": "https://openthemagazine.com/columns/the-next-ai-wave-smaller-specialised-models-are-indias-natural-strengths", "published_at": "2026-07-18 04:08:05+00:00", "updated_at": "2026-07-18 04:22:07.739293+00:00", "lang": "en", "topics": ["artificial-intelligence", "large-language-models", "ai-policy", "ai-ethics", "ai-infrastructure"], "entities": ["OpenAI", "Nvidia", "Microsoft", "Meta", "Anthropic", "Maruti Suzuki", "Amazon", "Vivek Wadhwa"], "alternates": {"html": "https://wpnews.pro/news/the-next-ai-wave-smaller-specialised-models-are-indias-natural-strengths", "markdown": "https://wpnews.pro/news/the-next-ai-wave-smaller-specialised-models-are-indias-natural-strengths.md", "text": "https://wpnews.pro/news/the-next-ai-wave-smaller-specialised-models-are-indias-natural-strengths.txt", "jsonld": "https://wpnews.pro/news/the-next-ai-wave-smaller-specialised-models-are-indias-natural-strengths.jsonld"}}