As AI increasingly depends on hardware, India's capacity to design and manufacture AI-optimized chips could significantly elevate its position in the global tech landscape.

India's semiconductor market is projected to reach ₹80.3 billion by the fiscal year 2028, driven by the increasing demand for AI-specific chips.

Spatial computing, which integrates digital content with the physical world, is emerging as a transformative trend in India, projected to reach $11.3 billion by 2030, growing at a compound annual growth rate of 24.6%.

The IndiaAI Mission aims to democratize access to AI resources by providing over 18,000 GPUs at the world's most affordable rate of $1 per hour, compared to $2.5–3 globally.

India's start-up ecosystem is addressing hardware gaps, with initiatives like the Experiential Technology Innovation Centre (XTIC) at IIT Madras, which promotes affordable XR components.

There is a notable shift from general-purpose CPUs to specialized processors, such as GPUs and NPUs, which is fostering domestic innovation in AI hardware across various sectors, including healthcare and autonomous driving.

India is actively positioning itself as a global hub for AI-driven hardware development, challenging the perception that computing infrastructure is a settled issue.

The rise of Generative AI applications is sparking a 'hardware renaissance' in India, as highlighted in a recent Deloitte report.

Public-private partnerships are on the rise, exemplified by semiconductor fabrication plants being established in Gujarat and Assam by an Indian electronics manufacturer in collaboration with global firms.

AI hardware advancements are enhancing manufacturing processes through the use of autonomous robotics, predictive maintenance, and the development of digital twins for simulations.

Despite these advancements, challenges persist, including the energy-intensive nature of AI hardware, with data center power demand expected to surge by 160% by 2030, alongside regulatory issues related to spatial computing data governance.

India is also transitioning to edge AI systems, particularly in sectors like banking, defense, and healthcare, deploying custom AI hardware stacks to enhance performance.