Global technology giants Amazon.com Inc. and Microsoft Corp. have committed a combined $52 billion in fresh investments in India over the coming years, with a significant portion earmarked for artificial intelligence (AI) infrastructure, underscoring India’s growing importance in the global tech and digital economy.
The investment push comes at a time when global fund managers are increasingly turning bullish on Indian equities, seeking diversification as concerns rise over a potential AI bubble in global markets.
India Emerges as a Key Equity Diversifier
Several global asset managers believe India is well-positioned to attract capital as investors reassess heavy exposure to AI-driven stocks. Aberdeen Group Plc expects Indian equities to stage a rebound next year, while Principal Asset Management Co. and Eastspring Investments view India’s low correlation with the AI trade as a strategic hedge against global markets dominated by a handful of large tech companies.
Strategists at HSBC Holdings Plc and Jefferies Financial Group Inc. have also echoed similar views, highlighting India’s relative insulation from volatility tied to AI-led rallies.
Valuations Attractive After Recent Underperformance
After underperforming global peers this year, Indian stock valuations have cooled to near their five-year average, making the market more attractive from a risk-reward perspective. As enthusiasm around AI stocks moderates globally, India’s consumption-driven economy is regaining investor interest.
Unlike markets heavily skewed toward technology, India’s equity gains are supported by banks, consumer-focused companies, and services, offering broader participation and reducing dependence on a narrow set of AI winners.
Strong Domestic Growth Story
“India can be a good diversifier for portfolios in 2026 as it has low correlations with other markets, and any pause in the AI trade could see capital flowing into India,” said Raj Singh, Multi-Asset Manager at Principal AMC.
He added that India’s investment appeal is strengthened by tax cuts, labour law reforms, strong domestic liquidity, supportive government policies, and stabilising corporate earnings, all of which reinforce the country’s long-term growth narrative.
Big Tech Bets Reinforce India’s AI Potential
The massive investment commitments from Amazon and Microsoft further validate India’s role as a key hub for AI infrastructure, cloud services, and digital innovation, while also boosting confidence among global investors looking for growth opportunities beyond overstretched tech valuations elsewhere.
As the global AI frenzy shows signs of cooling, India is increasingly being seen as a balanced, diversified, and resilient equity market for the years ahead.
