Anthropic's suspension of access to its Fable 5 and Mythos 5 models for foreign nationals, following a U.S. government directive, has sparked intense debate in India about AI sovereignty. Indian founders, investors, and policy experts are questioning whether India can afford to rely on a handful of U.S. frontier AI providers. Reactions range from calls to embrace open-source and domestic models to proposals for a massive national AI investment fund of up to $26 billion. The episode is seen as a geopolitical wake-up call, with one expert noting that 'American AI models are bound to American geopolitics.' India's AI ecosystem remains largely application-focused, with only a few startups pursuing foundational model development.
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