Indian firms turn to Chinese LLMs as AI costs rise
deepseek
| Source: Mastodon | Original article
Indian firms are shifting to Chinese LLMs from DeepSeek, Alibaba and Moonshot AI to curb AI spending, deepening India's reliance on Chinese tech despite longstanding tensions.
Indian firms are increasingly turning to Chinese large‑language models to curb soaring AI expenses. Start‑ups in the consumer‑tech sector that investors have met since mid‑2025 are adopting open‑weight models from providers such as DeepSeek, Alibaba and Moonshot AI. According to Puneet Kumar, CEO of Mirae Asset Venture Investments India, these models “rely on publicly accessible parameters” and can reduce spend “by an order of magnitude.”
The shift highlights a growing cost‑driven reliance on Chinese AI infrastructure, even as India has long positioned itself against Beijing on strategic technology. By using openly licensed models, companies sidestep the premium pricing of Western‑origin LLMs, but the move raises concerns about AI sovereignty and cybersecurity. Analysts note that dependence on foreign‑hosted models could expose sensitive data to jurisdictions with differing privacy regimes, and may complicate India’s ambition to build a home‑grown AI ecosystem.
Policymakers are likely to scrutinise the trend. Watch for statements from the Ministry of Electronics and Information Technology on whether existing data‑localisation rules will be tightened, and for any legislative proposals aimed at encouraging domestic model development or mandating security audits of foreign AI services. Industry observers will also track whether Chinese providers respond with tailored compliance offerings for Indian clients, and whether Indian venture capital continues to back startups that favour low‑cost, foreign‑sourced models over indigenous alternatives.
The emerging preference for Chinese LLMs underscores a tension between immediate cost pressures and longer‑term strategic autonomy, a balance that will shape India’s AI policy landscape in the months ahead.
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