SynopsisIndia faces hurdles in building globally competitive foundational AI companies, with top research talent concentrated in San Francisco and limited appetite for large, high-risk investments, Menlo Ventures partner Deedy Das said at The Economic Times World Leaders Forum 2026. He sees stronger opportunities for Indian startups at the application layer.ETtechETtech's Samidha Sharma in conversation with Zingroll's Harshit Yadav, Menlo Ventures's Deedy Das and Wispr Flow's Tanay Kothariat at ET’s World Leaders Forum.India faces a significant challenge in building globally competitive foundational artificial intelligence (AI) companies as top research talent remains concentrated in San Francisco and local investors are yet to demonstrate the appetite for large, high-risk bets required at the model layer, Menlo Ventures partner Deedy Das said.“Any competent foundational model builder out of India, you have to ask the question: why would you work at Sarvam and not at OpenAI or Anthropic?” Das said at The Economic Times World Leaders Forum 2026, held in New Delhi on August 21-22. “If you joined a company like Anthropic or OpenAI three years ago, you would be worth $100 million today. It’s very difficult for somebody to reject that.”Das is a partner at Menlo Ventures, the Silicon Valley-based venture capital firm and early backer of Anthropic, focussed on investments in AI, infrastructure, and enterprise software. Menlo Ventures first invested in the Claude maker in 2023 when it was still pre-product and pre-revenue, and has supported it across subsequent financing rounds. It also operates the $100-million Anthology Fund in partnership with Anthropic to back early-stage AI startups.Also Read: VCs becoming marginal in AI cycle, enterprises should invest in the sector: Peak XV’s Shailendra SinghDas said such investments underline the amount of risk capital needed to compete in foundational models, where companies must spend heavily on computing infrastructure and research before generating meaningful revenue.He was also bullish on Anthropic’s prospects as it prepares for a public listing. Asked whether a valuation of around $2 trillion that’s being discussed for Anthropic was justified, Das said it would still undervalue the company.“It’s way under(valued)... I think it should be more,” he said, pointing to the company’s rapid revenue growth and comparing its potential valuation with other large technology companies. "Look at SpaceX. SpaceX makes nothing near that kind of money. And look at how the markets price SpaceX.”Anthropic confidentially filed for a US IPO in June and was last valued at $965 billion after raising $65 billion in May. Its annual revenue run rate crossed $65 billion by July, up from around $9 billion at the end of 2025.Das said India could, however, have stronger opportunities at the application layer, while investments in computing infrastructure were also creating opportunities further down the AI stack. His comments come as the government steps up its sovereign AI push under the IndiaAI Mission, which has selected 20 indigenous foundation-model proposals and sanctioned subsidised compute for 237 projects.Other founders on the panel pointed to India’s growing importance as an AI market. Wispr cofounder and chief executive Tanay Kothari said that over the past nine months, India had gone from being a market that companies did not prioritise to “one of the primary markets people wanted to come to”.Menlo Ventures led a $280 million round in Wispr earlier this month that valued the voice AI startup at $2 billion.Zingroll founder Harshit Yadav said Indian entrepreneurs could find a larger opportunity in AI applications. “It’s generally been true in history that most technology shifts... when they plateau, it’s usually the application that holds most of value,” he said. ...moreElevate your knowledge and leadership skills at a cost cheaper than your daily tea.Subscribe Now