India Bets on AI With World's Cheapest Compute as DeepSeek Gains Traction

India’s IT minister, Ashwini Vaishnaw, has positioned the country in the global AI race by offering the world’s cheapest computing rates—under $1 per hour—for high-end chips powering GenAI models.

This rate will be part of the government’s Rs 10,000 crore IndiaAI mission, which will soon invite proposals for model development. Six startups and developers have been identified to build the model in 10 months.

So far, commitments have been secured for 18,693 GPUs. Reportedly, companies like E2E Networks Ltd. and Jio Platforms are competing to develop this capacity.

Currently, the average cost per AI computing unit is Rs 115.85 per hour. To lower costs, the government will subsidise 40% of computing expenses, making AI research and development more affordable.

India’s push comes as Chinese AI startups like DeepSeek gain global traction, challenging US giants such as OpenAI.

Vaishnaw also confirmed that India will “very soon” host DeepSeek on Indian servers, similar to how it did with Meta’s Llama, to address privacy concerns.