Data centres, fintech and edtech to drive India’s AI growth; private capital, policy key: Experts

India’s artificial intelligence (AI) story is likely to be driven by data centres, fintech and edtech in the coming years, according to Axis Mutual Fund’s Shreyash Devalkar and Ashish Naik. The fund managers believe that while India does not yet have direct GPU or semiconductor plays like the US, several enabling sectors are emerging as attractive investment opportunities.

“India’s AI adoption will not be led by chipmakers or hardware manufacturers, but by applications that leverage AI to solve local problems,” said Naik, Equity Fund Manager at Axis Mutual Fund. He pointed out that data centre development, fintech innovation and digital education platforms are at the forefront of this transformation, supported by growing digital infrastructure and regulatory initiatives.

Devalkar, Head of Equity at Axis Mutual Fund, noted that policy support and private capital will play a crucial role in scaling India’s AI ecosystem. “The AI Mission and related government incentives are encouraging, but large-scale success will depend on how private players collaborate with policymakers to create sustainable business models,” he said.

The experts highlighted that valuations in global AI-related companies have surged to frothy levels, and Indian investors should focus on identifying businesses with clear visibility on profitability. Naik added, “We do not have a listed Nvidia-type company in India yet, but there are opportunities in firms building localised AI models or enabling infrastructure.”

They also emphasised that the broader technology and innovation cycle in India is maturing, with more listed firms now developing and deploying AI solutions across industries. The recent government push through the IndiaAI Mission, with a proposed investment of over $1 billion, is expected to provide further momentum.

For investors, Devalkar and Naik advised a measured approach. Instead of chasing momentum, they suggested tracking companies in sectors that are integrating AI into existing processes, as this could deliver steady returns over time.

While India may still be some distance away from producing a global AI giant, experts believe the foundation for sustainable growth in the space is being laid.