Sovereign AI and National Security
This report was released at the India AI Impact Summit 2026.
Artificial Intelligence (AI) has rapidly become a foundational driver of national security, economic resilience, and digital governance in nations across the world. In India, the stakes are uniquely high due to the country’s population-scale digital systems and its growing dependence on AI for cybersecurity, financial integrity, disaster response, and critical public services.
This report, Sovereign AI and National Security, examines how India can strengthen its autonomy, reduce strategic vulnerabilities, and build trusted, resilient, and sovereign AI ecosystems aligned with national interests.
Global AI Capabilities and Risks
Global AI capabilities are increasingly concentrated among a small number of technology giants. These dependencies extend across the AI value chain, from cloud computing and large-scale models to semiconductors and advanced infrastructure. For India, such concentration poses heightened risks due to the scale of initiatives such as Aadhaar, with more than a billion residents enrolled, and UPI, now the world’s largest real-time payments system handling over 130 billion transactions annually.
At this magnitude, any external dependency can escalate into a national vulnerability impacting digital identity, financial stability, and public-sector operations.
India’s Unique Strategy
India’s strategy differs significantly from global models. While the U.S. relies primarily on private industry and China on state-owned platforms, India has pioneered an infrastructure-led digital public ecosystem built on openness, interoperability, and public governance. Digital Public Infrastructure (DPI) like Aadhaar, UPI, and the Open Network for Digital Commerce (ONDC) forms the foundation on which India intends to build Sovereign AI capabilities.
This model ensures that core infrastructure remains publicly governed while innovation at the application layer flourishes through private-sector participation.
Key Layers for AI Sovereignty
The report identifies five key layers essential for achieving AI sovereignty:
- Application layer: Localized AI solutions in sectors such as agriculture, healthcare, and governance that reflect India’s socio-economic context.
- Model layer: Development of efficient domestic AI models (20–50B parameters) capable of competing globally while serving national needs.
- Chip layer: Indigenous chip design and advanced semiconductor manufacturing, with ambitions to achieve cutting-edge 2nm production capability.
- Infrastructure layer: Creation of gigawatt-scale data centers and a national 38,000-GPU compute pool to reduce reliance on foreign cloud platforms.
- Energy layer: Sustainable energy sources, including nuclear Small Modular Reactors (SMRs), to power the next generation of AI workloads.
Institutional Readiness and Governance
Achieving sovereignty across these layers requires strong institutional readiness, cross-ministerial coordination, and consistent governance frameworks ensuring transparency, accountability, and AI auditability. At the same time, India must balance critical trade-offs: openness versus security, innovation speed versus regulatory oversight, and global integration versus autonomy.
Rather than pursuing isolation, India is adopting a hybrid model, leveraging global innovation while ensuring strategic control over data, compute, and core AI systems.
The Pathway to Trusted Digital Infrastructure
Ultimately, Sovereign AI is positioned not as a restrictive approach but as a pathway to trusted digital infrastructure, national resilience, and global competitiveness. India’s experience demonstrates that digital sovereignty can co-exist with open ecosystems, creating an approach that may serve as a blueprint for other emerging economies navigating the future of AI governance.
