New Delhi, Jan. 30 -- India should resist the temptation to compete in the global race to build the most powerful artificial intelligence models and instead focus on developing smaller, sector-specific AI tools aligned with its economic priorities, the Economic Survey 2025-26 has recommended.

In a clear shift away from the AI arms race that has led companies such as Google, Microsoft, OpenAI and Apple to invest billions into building large capacities for foundational models, the survey argues that India's strengths and constraints demand a different strategy - one that focuses on practical use cases rather than headline-grabbing frontier models.

"India's access to cutting-edge computer infrastructure is limited, financial resources for ...