US-China AI Rivalry Stirs Up Trouble for India's Tech and Crypto Sectors

India's technology and crypto sectors are facing growing pressure due to the intensifying AI rivalry between the US and China. A draft letter reportedly prepared by the US State Department addresses 35 countries involved in its AI initiatives, asking them to make clearer choices about their international technology partnerships.

The proposal comes as the US seeks to strengthen its position in the global AI race and limit China's access to advanced technology, computing resources, and international partnerships. India has developed closer technological ties with Washington while maintaining strategic relationships with other major powers.

This could test India's approach of maintaining strategic flexibility, which may become harder to maintain if the global technology industry separates into American and Chinese ecosystems.

The consequences extend beyond software, as access to advanced chips, cloud computing, data centers, investment, and high-performance computing infrastructure could increasingly depend on geopolitical relationships.