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The world is changing. Oil, once the single most coveted resource for nations and corporations alike, is being eclipsed by something far more potent: the silicon powering artificial intelligence. With demand for large-scale computing surging, control over advanced AI chips has become a new strategic asset. The result is a new kind of arms race, defined not by barrels of crude oil but by racks of GPUs and AI accelerators. In 2024, the global AI-chip market was estimated at around USD 123 billion and is projected to surge to more than USD 311 billion by 2029. That growth reflects not a gradual uptick but exponential demand for power, for memory, for speed. These chips don't just run phone apps; they power generative AI, large-language models, cloud services, data center inference, automated manufacturing, defense, and more. Control of that computational power now shapes who leads in technology, economy, and national security.

At the center of this shift is one company: Nvidia, a firm whose GPUs have become as vital as oil refineries in the previous century. That company's products underpin many of the world's most powerful AI systems, and often, entire national AI aspirations depend on access to those chips. Governments are increasingly treating AI-chip supply as strategic infrastructure, recognizing the stakes. For decades, semiconductor manufacturing had been concentrated in a handful of countries, producing chips for everything from smartphones to servers. But as AI's power grows, so does the danger of dependence on foreign suppliers. Export restrictions, supply-chain pressure, and diplomatic bargaining: all are now tools in a geopolitical game. The response across the world has been clear: The countries that once competed for oil wells are now building chip fabs, design houses, packaging plants, and full supply ecosystems. Subsidies, tax incentives, and federal backing have become the norm. The goal: semiconductor sovereignty. And with that, the race is on.

Into this volatile, high-stakes environment steps a country that for decades was more a consumer of electronics and chips than a supplier. That country is betting it can rise. It wants to participate not just in global supply chains but also to command them. Shift from importer to innovator, buyer to maker. That country is India. Under a national initiative launched a few years ago, the government has laid out what effectively amounts to a roadmap for chip sovereignty: financial incentives that cover as much as 50% of project cost for eligible semiconductor fabs; fiscal support for domestic chip and display manufacturing; and encouragement for startups or firms to set up chip design, packaging, and testing. The pace has accelerated: by mid-2025, the government in total had approved 10 major semiconductor projects across six states. These span wafer fabrication, advanced testing and packaging, and compound-semiconductor manufacturing basic parts of the supply chain that many countries depend on foreign suppliers for. Such efforts signal a shift in India's ambitions. No longer is it just hoping to ride the wave of global electronics demand; it wants to build the wave. Instead of being dependent on others for AI hardware, it seeks to produce chips, package them, test them, and maybe someday design its own AI accelerators. This could reduce reliance on foreign tech, especially in areas considered strategically sensitive, such as defense, infrastructure, telecom, or national-scale AI deployment, argue analysts. This chip sovereignty push isn't unique to India. Around the world, nations are embracing what could be called "semiconductor nationalism." Once-trusted supply chains are now seen as vulnerabilities. Export controls especially by countries controlling the most advanced technology are becoming tools of foreign policy. Countries barred from importing top-tier chips find themselves scrambling to shore up domestic talent, invest heavily, or cultivate alternate supply routes.

The geopolitical implications are very real. Chip supply and thereby access to advanced AI compute determines which countries lead in AI research, which nations can deploy AI for defense or surveillance, and which economies dominate data-based industries. In this new world, chips are no longer commodities. They are strategic ammunition. For India, that makes the pursuit of domestic semiconductor capacity more than a question of economic ambition; it is one of digital sovereignty. If the world divides into blocs those who control advanced AI hardware and those who don't India could choose which side it wants to be on. A growing chip-making capacity on home soil does more than reduce the risk of supply disruption or sanction-driven blackouts. It gives India bargaining power. It gives Indian firms and institutions access to locally manufactured computers, giving them a shot at global competition in AI, telecom, manufacturing, and more. That can also potentially turn India into a supplier not just a consumer to countries that prefer a stable, democratic manufacturing base outside of traditional hubs. Most critically, this is not a slow and incremental process: The global AI-chip market is continuing to see very rapid growth; as of 2024, it is already worth more than $123 billion, with demand set to more than double over the coming five years.

The Asia-Pacific region including India, China, South Korea, and Japan is expected to be among the fastest-growing markets. The recent growth underlines why countries look at AI chips no differently from strategic resources: they power the future economy, intellectual property, defense systems, infrastructure, AI-driven public services, digital governance, and control of data. The more a country controls its own supply chain from wafer to package to final AI accelerator the less vulnerable it is to external pressures and geopolitical shocks.

But achieving that control is not simple: building chip fabs and creating supply ecosystems requires huge capital investment, policy stability, a skilled workforce, and technological know-how. For decades, India lacked these at scale. That is changing but the transformation will take time. The approved projects under the national mission are early steps, not guarantees. Success will depend on execution, global demand trends, and whether the rest of the world accepts India as a competitive supplier.

Still, the direction is clear: the era of "buying chips from abroad" is ending. The era of "making chips at home" is beginning. In that transition lies the possibility of a fundamentally different kind of power: not control over oil or minerals, but control over the compute that defines the next generation of technology-from AI and cloud to telecom, defense, and national infrastructure. In this new arms race, chips are the most valuable resource; semiconductor sovereignty is the new national security. Countries that once competed over oil are now fighting over transistors, silicon wafers, fabs, and AI compute and increasingly, India intends to be among the contenders.

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