Anthropic’s sudden move to suspend access to its newest AI models following a U.S. government directive has raised fresh questions across the global technology industry. In India, the decision has reignited a long-running debate over whether one of the world’s largest AI markets can afford to rely on technologies built and controlled elsewhere.

The announcement came late Friday, when Anthropic said it had received the U.S. government directive requiring it to suspend access to its recently launched Fable 5 and Mythos 5 models for all foreign nationals, including its own foreign national employees. The move came shortly after the company announced a partnership with Indian IT services giant Tata Consultancy Services to expand enterprise AI adoption in India, underlining how closely the country’s AI ambitions have become tied to technologies developed and governed in the U.S.

While the broader implications remain unclear, some reports said the initial security concerns were first reported to the government by Amazon CEO Andy Jassy. And The Information said the White House is unlikely to extend similar restrictions to other AI companies and is privately blaming Anthropic’s handling of alleged jailbreak vulnerabilities. Anthropic has disputed the government’s characterization and argued the action should not have been taken.

Regardless, the development has triggered debate among Indian founders, investors, and policy experts over whether the country should accelerate efforts to build domestic AI capabilities, deepen investment in open-source alternatives, or continue relying on a handful of U.S. frontier model providers. For some, the episode is a wake-up call on technological dependence. For others, it is a reminder that access to increasingly critical AI systems can be shaped by geopolitical decisions beyond India’s control.

India has become one of the most important markets for frontier AI companies. Anthropic and OpenAI have both described the South Asian nation as their second-largest market after the U.S., reflecting its growing importance in the global AI race. The companies have already set up their offices in India, expanded local hiring, partnerships, and enterprise initiatives in recent months, betting on India’s vast base of developers, startups, and businesses to accelerate adoption of their latest technologies.

For many in India’s technology sector, Anthropic’s Friday announcement was about more than just one AI company. It reopened questions about the country’s long-term AI strategy and whether India could afford to remain dependent on a small number of foreign frontier AI providers.

“It completely changes things,” said Aakrit Vaish, founder of Indian AI venture platform Activate, referring to Anthropic’s decision. “I think this materially changes the way all of us should be thinking about sovereign AI in India.”

Vaish told TechCrunch that he woke up on Saturday morning “shocked and confused” by the announcement and said it strengthened the case for developing domestic AI capabilities. He expects startups to increasingly turn to open-source models and plans to encourage companies in his portfolio to reduce their dependence on a small number of frontier AI providers.

For some founders, the bigger concern was what restrictions on frontier AI access could mean for competitiveness. Vijay Rayapati, co-founder and CEO of Atomicwork, told TechCrunch that the episode highlighted the risks facing startups whose teams span multiple countries if access to advanced AI systems increasingly becomes subject to geopolitical restrictions.

Atomicwork has around 25 employees in the U.S., though much of its product engineering team is based in Bengaluru, India.

“If your AI team is not made up entirely of U.S. citizens, you are at a competitive disadvantage,” Rayapati said, arguing that unequal access to frontier AI models could give some companies a significant edge over rivals.

The concern comes as parts of India’s tech sector are already grappling with questions about how AI could reshape the economics of global talent. This week, U.S. real estate technology company Opendoor shut its India office less than two years after expanding in the country, with CEO Kaz Nejatian citing a push to bring operational work closer to customers in the U.S. and a shift toward smaller AI-native teams.

While Opendoor did not specify how much of the decision was driven by AI-related efficiencies, the move added to a broader debate about how advances in AI could affect the future of global technology work and what that might mean for India’s position as an engineering talent hub.

Beyond Anthropic

In addition to startups and AI builders, the Anthropic episode also prompted a broader debate among India’s technology leaders about dependence on foreign AI infrastructure.

Sridhar Vembu, founder of Indian SaaS company Zoho, said the move showed that “technology is the ultimate weapon” and urged Indian organizations to increasingly embrace smaller and open-source models.

“What can our government do right now? Ensure that orgs in India embrace smaller models, both Indian and Chinese open source ones,” Vembu wrote on X.

Investor and former Infosys executive Mohandas Pai responded to Vembu on X, arguing that the development highlighted the need for a far more ambitious national AI strategy and calling on the government to substantially increase investments in AI, computing infrastructure, and deep technology.

“We are way behind and need a national mission to get going quickly,” Pai wrote, urging the government to create an annual ₹500 billion (about $5 billion) fund for AI and deep tech, alongside a ₹2 trillion (around $21 billion) credit guarantee program to support cloud infrastructure, hardware, and semiconductor development.

Pai’s proposal would dwarf India’s existing AI efforts. In 2024, New Delhi approved the IndiaAI Mission with an outlay of ₹103.72 billion (about $1.2 billion) over five years, aimed at expanding compute infrastructure, supporting startups, and developing indigenous AI capabilities.

Despite growing interest in AI and New Delhi’s push to develop domestic capabilities, India remains a relatively small player in frontier model development. Only a handful of startups are pursuing foundational AI models, including Sarvam, which released open-source models earlier this year. However, another high-profile AI startup, Krutrim, pivoted toward cloud and AI infrastructure services after initially positioning itself around foundational model development.

Much of India’s AI ecosystem has instead concentrated on applications and specialized models built on top of existing foundation models. Recent examples include Avataar AI, which launched a video-generation model earlier this week aimed at providing a lower-cost alternative to offerings from rivals including Google’s Veo, Kling, Luma, and Runway.

Not everyone agrees that the primary challenge is a lack of capital. Responding to Pai’s comments, Lightspeed partner Hemant Mohapatra argued that the biggest constraints to building globally competitive AI companies are talent, access to computing resources, and execution, rather than simply the size of investment commitments.

Mohapatra estimated that training a frontier AI model could cost anywhere from hundreds of millions to several billion dollars, depending on the approach, but said successful AI companies have historically scaled their capital requirements over time as adoption grew.

Yet for some policy observers, the implications extend well beyond AI startups or model providers.

Prasanto Roy, a New Delhi-based technology policy expert who advises multinational companies, said the episode would likely reinforce concerns within the Indian government about strategic autonomy, comparing it to the lesson many countries drew from Russia’s loss of access to SWIFT and other parts of the global financial system following its invasion of Ukraine.

He told TechCrunch that the move was likely to provoke a significant nationalist backlash in India and described it as a poorly considered decision by Washington, with consequences extending far beyond Anthropic itself.

“Even if this is corrected or reversed, the Anthropic episode shows there’s no such thing as a geopolitically neutral foreign LLM,” Roy said. “American AI models are bound to American geopolitics.”

Opendoor, the San Francisco-based online home-buying platform, is shutting down its India operations less than two years after expanding its presence in the country. The decision has become a flashpoint in the debate over whether AI is starting to alter the economics of offshore work.

In announcing the decision on Wednesday, CEO Kaz Nejatian cited a push to bring operational work back to the U.S., where Opendoor’s customers are, and a shift toward smaller AI-native teams. The company did not respond to requests for comment on how many employees were affected or how much of the decision was driven by AI efficiency. But the announcement quickly gained traction across Silicon Valley, where founders, investors, and outsourcing experts see it as an early example of how AI is reshaping the economics that made India a global hub for back-office operations.

To understand why they care, it helps to know what’s at stake for India. It has evolved far beyond its roots as a destination for outsourced back-office work. The country is now the world’s largest Global Capability Center market — a term for dedicated offshore units multinationals set up to handle everything from IT and finance to R&D — with more than 2,100 centers employing about 2.36 million people and generating nearly $100 billion in annual revenue.

Opendoor had built a large team in India to handle manual workflows across fragmented systems, Nejatian said. The company had nearly 250 employees in India when it opened offices in Chennai and Bengaluru in 2024. But the entire company has been scaling back in recent years. Securities filings show Opendoor employed 1,042 people globally at the end of last year, compared with 1,470 a year earlier. Similarly, its non-U.S. workforce declined to 184 employees at the end of last year, compared with 342 employees at the end of 2024.

Those broader workforce reductions make it difficult to view the India closure solely through the lens of outsourcing. Opendoor has been cutting costs across the business after a difficult period for the U.S. housing market that hit online home-buying companies especially hard. Still, the language Nejatian used to explain the move resonated with investors and outsourcing analysts who see AI reshaping how companies organize operational work.

Some investors viewed the decision as a sign of what AI could mean for India’s vast outsourcing workforce. “As manual work gets replaced by AI, a lot of jobs will be lost in India,” wrote Sheel Mohnot, co-founder of Better Tomorrow Ventures.

Others viewed Opendoor as evidence of a larger shift in how companies are organized. Keshav Lohia, a venture capitalist at Emergent Ventures, described the decision as a “watershed moment” for AI-driven operations, arguing that advances in AI are beginning to challenge the cost-arbitrage model that made India a popular offshoring destination.

Phil Fersht, chief executive of HFS Research, an advisory firm that tracks the global outsourcing and business services industry, told TechCrunch that the development should not be viewed simply as jobs moving from India to the U.S. The more important shift, he said, is that AI is reducing the amount of operational labor companies require in the first place, allowing firms to run leaner organizations regardless of location.

“This is not an isolated restructuring,” Fersht said. “It is part of a much broader pattern we are starting to see as companies redesign operations around AI, automation, and much leaner workflows.”

Fersht argued that the winners would be companies that combine AI, software, and human expertise to deliver outcomes without continually adding headcount, a model he described as “services-as-software.” While Opendoor may be one of the first high-profile examples, he said it is unlikely to be the last.

Some investors are already extrapolating beyond individual companies. Varun Rekhi, a venture capitalist at Speedinvest, argued that if AI reduces demand for labor-intensive services, it could eventually pressure one of India’s most important export industries, which is built around supplying talent and expertise to global corporations.

For now, Opendoor remains a complicated case study — a company that has been cutting headcount broadly for years, and whose India exit may say as much about its own struggles as it does about the future of AI and offshore work.

TL;DR

Blackstone-backed AirTrunk plans to invest $30 billion in India by 2030, building 5GW of data centre capacity across multiple states. The announcement comes six weeks after AirTrunk entered India through its acquisition of Lumina CloudInfra.

Six weeks ago, AirTrunk did not operate in India. Now it wants to spend $30 billion there.

The Blackstone-backed hyperscale data centre operator announced on Thursday that it plans to invest more than INR 3,000 billion ($30 billion) in India by 2030, building over 5 gigawatts of digital infrastructure capacity across multiple states and union territories. The figure represents planned spending, not committed capital, and the four-year timeline leaves considerable room for adjustment. Still, if executed, the programme would rank among the largest digital infrastructure commitments in the country’s history.

Prime Minister Narendra Modi publicly welcomed the commitment, saying it would strengthen India’s position as a global hub for cloud computing and AI. The endorsement followed meetings between AirTrunk founder and CEO Robin Khuda and federal and state government officials in Maharashtra and Andhra Pradesh.

From zero to $30 billion in six weeks

AirTrunk entered India in April through the acquisition of Lumina CloudInfra, which gave it a 600-megawatt development pipeline across Mumbai, Chennai, and Hyderabad. The new $30 billion plan represents a dramatic escalation of that position.

The centrepiece is a 3GW campus at the Raigad Penn Growth Centre on the outskirts of Mumbai, for which AirTrunk has signed a letter of intent for land allotment with the Maharashtra government. According to a single industry report, that project alone carries an estimated price tag of $21 billion, though the figure has not been confirmed by AirTrunk or the Maharashtra government.

“Capital is mobile, and India is creating the conditions for it to thrive,” Khuda said. “India is taking a top-down approach to AI with clear government-led initiatives, a world-class talent pool, and massive availability of renewable energy.”

Why India, why now

India’s data centre market has been accelerating since 2024, but the pace of new commitments in 2026 has been extraordinary. Google has pledged $15 billion for a southern Indian data centre hub. Microsoft has committed $17.5 billion. Amazon is targeting up to $35 billion by 2030. The Adani Group has reportedly outlined a $100 billion programme through 2035, including a 5GW renewable-powered hyperscale platform, though those figures come from industry reports rather than a formal company commitment.

The government has matched the private capital with policy. India’s February budget introduced a 20-year tax holiday through 2047 for foreign technology firms using Indian data centres for global cloud services. The IndiaAI Mission has received approximately £1 billion ($1.2 billion) in funding, and the India Semiconductor Mission has been backed with approximately £7.5 billion ($9 billion).

AI-related colocation leasing more than doubled to 348MW in the past year, now accounting for nearly 20% of total demand. Between March 2025 and April 2026, operators announced roughly 30 large projects adding about 3.5GW of planned capacity across the country. Schneider Electric expects its India data centre business to become its single largest unit within three to five years.

Blackstone’s hyperscale bet

AirTrunk is the vehicle through which Blackstone is making its largest infrastructure play in the Asia-Pacific region. The private equity giant acquired AirTrunk in December 2024 for an implied enterprise value of over A$24 billion ($16 billion), alongside Canada Pension Plan Investment Board, which took a 12% stake. It was the largest data centre transaction in history at the time.

Blackstone has since been expanding AirTrunk’s footprint aggressively. The platform now spans more than 3GW of operating and planned capacity across 20 campuses in six regions: Australia, Singapore, Japan, Malaysia, Hong Kong, and India. Separately, Blackstone is seeking up to $1.75 billion in a NYSE IPO for its Digital Infrastructure Trust, packaging hyperscaler-leased AI data centres as a public REIT.

The India push fits a clear pattern. Blackstone had already committed approximately $11 billion to Indian data centres through Lumina before the AirTrunk acquisition. The new $30 billion figure nearly triples that exposure.

The execution question

The numbers are staggering, but so is the gap between announcements and operational capacity. India’s total live IT capacity exceeded 1.6GW by the end of 2025, the product of years of cumulative buildout. Just 371MW was added in 2025 alone. AirTrunk’s proposed 5GW, combined with the commitments from Google, Microsoft, Amazon, and Adani, would require India to build more capacity in the next four years than it has built in its entire history, several times over.

The discussions between Khuda and government officials reportedly focused on precisely the bottlenecks that could slow that buildout: access to reliable and cost-effective power, renewable energy, sustainable water supply, talent development, streamlined approvals, and coordination between state and federal governments on strategic infrastructure.

India is not the only country chasing hyperscale AI infrastructure investment. Malaysia, Saudi Arabia, and several European nations are offering competing incentive packages. AirTrunk itself recently expanded its Malaysian platform to over 700MW. The $30 billion figure signals intent, but the timeline to 2030 leaves room for the kind of recalibration that large infrastructure programmes routinely undergo.

What is not in question is the direction of travel. Whether the final number is $30 billion or something smaller, India is rapidly becoming one of the world’s primary construction sites for the physical infrastructure that AI requires. The question is whether the country’s grid, water supply, and planning systems can keep pace with the capital flooding in.

British fintech Revolut has quietly begun rolling out its services in India as part of a controlled beta program ahead of a broader launch, marking a significant milestone in its years-long effort to enter the country’s fast-growing digital payments market.

Revolut started taking signups for its India app earlier this year, and some users who joined the waitlist have been gaining access to its services over the past few weeks, TechCrunch has learned. The company confirmed the rollout and said a few thousand customers in India are already using the platform.

The rollout marks a significant milestone in Revolut’s years-long effort to enter India, a major digital payments market where the federal government-backed Unified Payments Interface (UPI) has transformed how consumers and businesses move money. UPI accounts for nearly half of global real-time payments transaction volume and processed a record 23.2 billion transactions worth ₹29.9 trillion (around $313.8 billion) in May, per Indian government data.

A Revolut spokesperson told TechCrunch that the company is currently “in the controlled onboarding of waitlisters” and that a beta version of its app, localized for Indian users, is available through the Google Play Store and Apple’s App Store.

“This is being done in order to gather feedback on core product functioning and enhance the overall customer experience and the value proposition before opening up the platform for a larger audience,” the spokesperson said.

The rollout is currently limited to a small subset of the company’s approximately 450,000 waitlisted users.

Users in the beta program can access UPI payments, e-money wallets, domestic prepaid cards, multi-currency cards, virtual cards, and disposable cards, the company said. Revolut plans to add its Lifestyle and RevPoints offerings before expanding the rollout. Family, or joint, accounts — available in some of Revolut’s overseas markets — will not be offered in India because such products require a banking license, the company said.

Revolut has been building its India business since 2021 and hired fintech executive Paroma Chatterjee to lead its local operations. In 2022, the London-headquartered company acquired Arvog Forex to strengthen its regulatory presence in the country and offer remittance and multi-currency account services. It later secured a prepaid payment instrument (PPI) license from the Reserve Bank of India, allowing it to issue prepaid cards, support digital wallets, and integrate with the UPI network.

The company told TechCrunch that it plans to open the app to direct onboarding of all users in the “near future” but declined to provide a specific launch timeline. Chatterjee had previously said in a LinkedIn post that Revolut was targeting a full product launch in India in Q2.

Revolut is targeting India’s growing base of digitally savvy consumers as it seeks to challenge incumbent banks and fintech firms in one of the world’s most competitive financial services markets. The company has previously said it aims to serve more than 150 million “globally aspiring, digitally native” Indians aged between 25 and 45, with a goal of onboarding about 20 million users by 2030 and processing at least $7 billion in transactions.

Consumer interest in Revolut has been building ahead of its broader India launch. According to Sensor Tower estimates shared with TechCrunch, Revolut’s app has been downloaded nearly 820,000 times in India since it became available in app stores. More than a third of those downloads occurred in 2025 and the first months of 2026.

While Revolut’s largest markets by app downloads remain in Europe, led by France, the U.K., Spain, Italy, and Germany, the company has increasingly looked to emerging markets for growth. Sensor Tower estimates downloads in Thailand and Vietnam grew 40% and 52%, respectively, in 2025, while downloads in Brazil surged 487% year over year to 1.8 million, highlighting the importance of markets such as India to its long-term expansion strategy.