Key takeaways
- Highlight the paradox of Indian investors promoting AI while sending their children abroad for education.
- Note India's AI startups raised over $250 million in generative AI deals in 2023.
- Emphasize the trend of Indian students studying abroad, with 1.3 million currently enrolled overseas.
- Point out the disparity in funding and tech scene robustness between India and the West.
- Acknowledge AI as a crucial theme in India's innovation economy, per Bain's latest report.
Indian investors will tell you, without missing a beat, that AI is India’s moonshot moment. Scroll through LinkedIn, and you’ll find VCs and tech entrepreneurs posting AI threads, doling out advice to startups and developers alike.
But while they’re pitching AI-first funds and championing “India’s decade,” their kids are quietly packing their bags for Boston, London, or Toronto.
When it comes to building the AI future, these investors are all in, even when they know that the tech scene is not so robust in India. “Indian investors will be like ‘I'm so bullish on the future of India’ and then send their kids to the US,” Deedy Das from Menlo Ventures commented on this trend.
This was happening while everyone from early-stage VCs to global funds like Bessemer Venture Partners was doubling down on India’s AI boom. In 2023 alone, Indian AI startups reportedly raised upwards of $250 million in generative AI deals.
Bain’s India Venture Capital Report 2024 calls AI one of the breakout themes of the year. SenseAI, one of the country’s few dedicated AI funds, paints AI as the “fountainhead” of India’s innovation economy. That’s another story that Sarvam, the poster child of India AI, also hasn’t raised enough funding when compared to the West.
But let’s talk about where the future builders are—not at IITs, not even at IISc. According to recent data, over 1.3 million Indian students are studying abroad, with nearly half a million in the US alone.
Das’s commentary followed a digital town square confession — founders, investors, operators, and engineers all admitted what everyone already suspected: the biggest backers of “India’s bright future” don’t want their kids to live in it.
“They’re bullish on the future of India, but they have to send their kids to college in the present,” wrote Kritarth Mittal of Soshals. Garv Malik didn’t mince words either: “India will grow, but they don’t want their kids to slog 10x for minimal returns... They want a comfortable life for their kids.”
Satyajeet Salgar, director of product management and UX, Google AI, pointed out that this trend isn’t even hidden anymore. On a recent trip to India, he noticed that many people he “ran into were clearly already planning for their (fairly young) kids to study abroad.”
Some rationalised it as a simple trade-off. “It's not very difficult to understand that I can invest in Ambani but not live like Ambani,” said a user. “From a purely financial perspective, Indian markets are absolutely worth investing [in]. Can’t say the same for the general quality of life or education here.”
Bullish Markets, Broken Schools
While Indian VCs continue to cheer the markets from the sidelines, their actions tell a different story. But perhaps, they have good reason for this.
A viral Reddit thread captures the frustration of a startup founder who opened up internship applications and was shocked by the low quality of Indian engineering talent.
“I recently posted a remote internship opportunity… Most of them had very weak fundamentals. It almost felt like it was just understood — ‘I’m a BTech, I won’t know everything, so you’ll have to teach me,’” wrote the founder, who later added that candidates from Egypt outperformed Indian MTechs in preparation, professionalism, and technical know-how.
The comments section quickly turned into a reflection of the system’s decay. “You know how many EE grads I've come across who've never held a soldering iron in their lives? Enough of them,” wrote one user. Another replied, “99.9% of them. Tbh I was one among them.”
This experience stands in stark contrast to the ambition India’s startup ecosystem wants to project globally.
India's AI ecosystem is already facing a shortage of senior technical and PhD-level talent. Reports suggest the best AI researchers trained in India often leave after graduation. And why wouldn’t they? If the top 1% are told, implicitly or explicitly, that they need a western stamp of approval to matter, they’ll go get it—and stay.
Parag Mehta, CEO of Positiwise Software, summed it up: “Kids studying abroad command higher compensation and better prospects overall... they want to escape the rat race in Indian education.”
And then there’s the long view. “The keyword being ‘Future’ here,” wrote a user on X with username Surender. “Yes, India will definitely be better than the USA and China in at least 50 years, but why would anyone want their children to suffer for 50 years?”
The contrast is sharp even in the tech ecosystem. “Indian startup bros will be like ‘I'm so bullish on the future of Indian AI’ and then release a TTS/STT translator,” joked Avik Chatterjee, website designer and editorial head, MBFT.
A lot of Indian startups have also started a Skip India Movement, skipping Indian use cases and going abroad to build revenue, hoping to come back someday.
For now, the market is bullish, but the boarding passes say otherwise.
