From ‘The Matrix’ to ‘Iron Man’, AI has long captivated our imagination. But what was once fiction has rapidly become foundation. AI is now transforming industries, economies and daily life. Nations are investing heavily – recognizing AI's role not only as a technological marvel but as a geopolitical and economic force. Though it feels new, the story of AI stretches back to the 1950s, when the term was first coined.

Since then, we've journeyed from the industrial revolution to the dot-com boom, to the dawn of Artificial General Intelligence (AGI). AI is evolving at an unprecedented pace. OpenAI’s ChatGPT, DeepSeek, Grok, and IBM’s Watson are just a few examples of how AI is integrating into our daily lives – it started from Fortran IV, GW Basic, C, C++, Power builder, Client Server architecture and so on, then came the internet revolution. Transformation and tech are moving at breakneck speed.

The game-changer was the launch of ChatGPT in Nov 2022 – powered by over 175 billion parameters. In doing so, it turned AGI from academic theory into tangible, usable reality. Today, over $1 trillion is invested in generative AI. The question isn’t whether AI will change our world, but how, how fast, and for whom. As AI reshapes the way we work, create, and learn, one truth stands out: knowledge is no longer a privilege – it’s just a prompt away.

AI: The Good, The Bad, The Ugly 
AI offers a paradoxical landscape – a powerful force of progress, yet one that brings disruption and risk. The Good is evident in how AI enhances efficiency, drives innovation and scales solutions in real time. In healthcare, AI-based diagnostics help compensate for the shortage of trained doctors. In agriculture, precision farming tools boost crop yields and reduce waste. In logistics and manufacturing, AI-based automation cuts cost and enhances supply chain responsiveness. For students in remote districts, AI-powered vernacular tutoring platforms will make education accessible.

But the Bad looms too. AI can also be employment disruptor. In the IT sector, tools like ChatGPT and GitHub Copilot have automated tasks once done by junior engineers and improved efficiency significantly. Serial tech entrepreneurs today believe they don’t need as many programmers or testers unlike the past. Firms are focusing on leaner, AI-driven models. According to McKinsey, up to 30% of low-end service jobs in IT could be automated by 2030. Businesses will become more profitable – but with fewer workers. Musk’s transformation of X reduced the workforce, and the platform runs with just 20% of its original staff, relying on AI to handle routine tasks while small, elite teams drive innovation. Meanwhile, Meta cut 21,000 jobs in 2023-24 to create a leaner, AI-focused company. The shift paid off: AI-driven tools boosted ad revenue and user engagement, earning Wall Street’s approval. As a result, Meta’s stock surged in early 2025. The future belongs to small, elite teams augmented by AI.

The Ugly part is AI is not just changing what we do – it’s rewiring how we think. With language models like GPT at our fingertips, deep thinking and creativity are giving way to instant summaries and auto-generated responses. We have heard cases from attorneys of AI producing erroneous case laws. A US judge wrote in an early order on a plaintiff’s filing that: “Six of the submitted cases appear to be bogus judicial decisions with bogus quotes and bogus internal citations.” He termed it “an unprecedented circumstance.” Dependency on AI for cognitive tasks could erode critical reasoning and originality. 

AI is both a revolution and a reckoning. It can uplift, equalise and accelerate –or it can deepen inequality, reduce human agency and deskill entire professions. The outcome depends not on the technology itself, but on how we shape, regulate and integrate it into our social and economic fabric.

China’s AI Response Post-ChatGPT—and Lessons for India
Since the launch of ChatGPT in 2022, China has significantly accelerated its AI preparedness to maintain a strategic edge in the global technology race. In 2024, it introduced the ‘AI+ Initiative’, aimed at embedding AI across its real economy – from manufacturing and healthcare to education and agriculture. In April 2025, China announced sweeping education reforms to integrate AI into curricula at all levels. This move ensures that future generations are equipped with digital literacy and AI fluency from a young age.

China’s tech sector has moved swiftly. Baidu’s Ernie Bot, a direct competitor to ChatGPT, has amassed over 300 million users. Companies like Alibaba, DeepSeek, ByteDance and Moonshot AI have launched advanced generative models tailored to language, reasoning and task-specific applications. Point to note here is that Deepkseek was developed at significantly lower cost than ChatGPT. Despite US export restrictions on semiconductors, Chinese AI firms have optimised their models to run efficiently on domestic hardware, demonstrating resilience and adaptability. To further strengthen its ecosystem, China has established a $8.2 billion AI investment fund, supporting startups and foundational research. At the same time, it has implemented the “Interim Measures for the Management of Generative AI” to regulate ethical use, safety, and ideological alignment through tools like ChatXiPT.

India, on its part, has launched a billion-dollar AI Mission, Centres of Excellence, and a robust AI compute infrastructure thru Sarvam AI, Gnani AI and so on. However, to match China’s scale and coherence, India must Invest and integrate AI into formal education from an early stage, foster stronger public-private partnerships to drive model development, support multilingual model development and implement a unified strategy for AI governance. Recently, the government selected three companies that it will support to develop sovereign AI models.

Conclusion: A Crossroads for India
AI brings the good, the bad, and the ugly. It enhances productivity and redefines business efficiency but simultaneously threatens routine jobs and critical thinking. The risk isn’t just unemployment – it is also cognitive dependency. In this new reality, being average is dangerous. The future belongs to those who master AI or design it.

India stands at a critical juncture. Will we harness AI to unlock new freedoms, or will we fall behind? To compete globally and uplift millions at home, India must act fast, invest boldly, and regulate wisely. Welcome to the AI era – where economic transformation is inevitable, but equity and ethics are not.

Dr Krishna GV Giri has over 27 years of senior executive leadership with global consulting and governments across continents, and has led transformative initiatives at the intersection of technology, policy, and growth.
Dr. Aishwary Kant Gupta specialises in technology, policy, and economic development.
The authors are, respectively, Distinguished Fellow & Special Advisor, Pahlé India Foundation, and Associate Fellow, Pahlé India Foundation.