Meghna Bal
The Economic Survey’s observations on compute and AI portend potentially significant developments in the upcoming Budget. First, it flags concerns raised by the Financial Times about off-balance-sheet leverage in global AI investments, alongside skepticism expressed by IBM’s CEO regarding the financial viability of large-scale data center expansion. Second, it highlights that the demands data centers place on water, energy, and finance may be difficult to reconcile with India’s economic and existential realities, where steady access to these basic amenities is still not universal. Taken together, these signals suggest that Budget 2026 is unlikely to offer subsidies or major outlays for data centers. This presents a unique opportunity for India to reimagine its conception of technological sovereignty.
Concerns Over AI Investments. In a digital economy typified by cross-border and multi-directional data flows, technological sovereignty need not hinge on physical localisation, but on predictability. Until now, the idea of technological sovereignty in India has largely meant building as much as possible domestically, and forcing localization where it was not. Ratcheting up the number of home-grown data centers fed into this vision.
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