Is India Missing Out on the AI Wealth Boom?
South Korea's AI-fuelled market rally has sparked debate about India's position in the AI economy. Here's why India's opportunity may be playing out differently.
Has India missed out on the AI wealth boom?
It is a question gaining traction after South Korea recently overtook India in total market capitalisation, fuelled largely by investor enthusiasm around artificial intelligence. As AI reshapes industries and stock markets alike, the biggest winners so far have been companies supplying the hardware that powers the technology.
That reality has sparked debate about whether India is capturing enough value from the AI revolution or merely consuming technologies built elsewhere. The answer, however, is more nuanced than the headlines suggest.
Why South Korea just stole a march
South Korea's recent leap ahead of India in total market capitalisation has reignited debate about who is benefiting most from the AI revolution. The answer begins with semiconductors. The country occupies a critical position in the global AI supply chain through memory and chip giants such as Samsung Electronics and SK Hynix.
These companies produce the high-bandwidth memory and advanced components required to train and run large AI models. As demand for AI infrastructure exploded, investors poured money into these hardware leaders.
Strong earnings, tight supply conditions, and growing order books have pushed valuations higher, helping South Korea's stock market surge ahead. The biggest profits in the current phase of the AI boom are flowing to companies that supply the computing backbone of artificial intelligence. South Korea happens to have some of the most important players in that category.
India's AI exposure sits in different places
India's AI story is unfolding differently. Unlike South Korea, India does not have major listed semiconductor manufacturers benefiting directly from the global chip boom. Instead, its strengths lie in software services, digital infrastructure, and the adoption of AI across industries.
Indian companies are increasingly deploying AI in banking, healthcare, retail, logistics, and government services. The country has also built a strong digital foundation through initiatives such as digital payments, identity systems, and cloud-enabled public infrastructure.
The challenge is that these gains appear more gradually than semiconductor profits. While chipmakers can experience rapid jumps in revenue during demand surges, AI-driven productivity improvements often take years to fully reflect in earnings and valuations. As a result, India's exposure to AI is real, but it is less visible in headline market-cap figures.
The other side of Korea's rally
South Korea's success comes with risks. A large share of the country's market gains is concentrated in a handful of semiconductor companies. While AI demand remains strong today, the memory chip industry has historically been cyclical.
Periods of rapid expansion are often followed by oversupply, weaker pricing, and slower growth. This concentration means South Korea could face sharper volatility if AI infrastructure spending cools or competition intensifies.
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India's market, by comparison, is more diversified. Financial services, consumer businesses, healthcare, manufacturing, and technology all contribute meaningfully to overall market performance. That diversity may limit dramatic AI-fuelled rallies, but it can also provide stability when specific sectors come under pressure.
What to watch next
Three developments will determine whether India can narrow the gap. The first is progress on semiconductor policy, including manufacturing projects and chip-design ecosystems. The second is the pace at which data centres, power infrastructure, and AI computing capacity expand across the country.
The third is whether India's listed technology companies can convert AI experimentation into meaningful revenue streams rather than isolated pilot projects. If these factors align, India could gradually move beyond being an adopter of AI technologies and become a more significant participant in the infrastructure layer of the AI economy.