MUMBAI: Underplaying the AI-valuation fears-led market routes in the West in recent weeks will spread to our markets, NSE chief executive Ashish Kumar Chauhan has said the US-led AI bubble has already been challenged by China’s cheaper open-source models and has also the killer tech has already lost the productivity gains from a perceived 90 percent to a low 7 percent now, opening up large leeway for our tech companies.
“The US-led AI bubble has already been challenged by China’s cheaper open-source models now. Also, the earlier belief that AI would capture as much as 90 percent of productivity gains has dropped to under-7 percent now. That opens up 93 percent of the market for our IT and service sectors to provide solutions, pushing back against fears that the global AI race will overshadow our tech services prowess,” he said at a CCI event in Mumbai on Monday.
Stating that the domestic markets remain steady and well-governed even as global volatility rises and AI-driven tech exuberance in the US and China grabs headlines, he said, “last year, we had raised nearly Rs 18 trillion through the markets, including Rs 1.69 trillion in fresh equities, making us the largest IPO market globally in terms of volume issuances,” he said.
"We do not need “sixes in every ball. Sachin Tendulkar may have scored 100 centuries, but fans still expect a six in every ball,” Chauhan said, adding that our capital markets also face the same impossible expectation, despite delivering one of the world’s strongest fundraising and governance records.
However, he flagged the low credit-to-GDP ratio of 0.66, which is far below the nearly 4 seen in the US and China, indication that the economy is underfunded.
"If we continue incentivising banks not to lend, the economy will suffer,” he warned.
Stating that our corporate governance regime is “much tougher than the US and 100 times better than China’s,” Chauhan said strong disclosures and automated, screen-based trading systems have helped build deep investor trust and differentiate India from other large markets. On valuation concerns, he said the PE ratio of 23 reflects markets catching up with earnings after a period of consolidation, and that historically faster-growing economies trade at higher multiples.