‘$30 billion in IT profits, but just 1% of AI patents...’: Investment advisor urges India to invest in real innovation

India dominates the global IT outsourcing landscape, commanding over half the market and powering the back-end of countless global corporations. Yet, when it comes to creating the intellectual property that will define the next technological era — artificial intelligence — India is barely a blip. Despite housing hundreds of AI startups and billions in IT profits, the nation contributes less than 1% to the world’s AI patents. This stark gap between operational prowess and original innovation is drawing sharp scrutiny.

Highlighting the imbalance, Mihir Vora, Chief Investment Officer at TRUST Mutual Fund, posted on X, “India with a market share of 50% of IT outsourcing in the world, has negligible presence in the development of AI intellectual property.”

Vora contrasted this with China’s aggressive push into AI. “60% of the patents in the Artificial Intelligence space are with China (which is smaller than India in IT services export). India holds less than 1% of the patents inspite of having hundreds of AI startups - means that they are only using AI for chatbots/customer service/business processes - not for cutting edge stuff,” he wrote.

He further noted that India's IT sector is projected to earn around $30 billion annually in profits — roughly Rs 2.5 to 3 lakh crore. Yet, despite this financial muscle, Vora stressed the need for deeper commitment to original research. “We need to invest more in innovation, research & development,” he said.

The urgency is underscored by the nature of AI itself — a non-linear force reshaping industries and geopolitics alike. The US and China have treated AI dominance as a national imperative, backing it with scale, capital, and infrastructure. This battle has intensified further with the emergence of DeepSeek, a new AI player that has reportedly rivaled top American models while using less advanced hardware. Its rise challenges the narrative that success in AI is solely about spending billions on GPUs and chipsets.

For India, the takeaway is clear: operational strength alone won’t secure a seat at the AI table. Without bold investments in original research and long-term IP creation, the country risks remaining a backend powerhouse in a front-end world.