Traditionally, investors focused on sectors like banks, IT, Auto, Pharma and FMCG. Then came this decade when artificial intelligence arrived and changed the script.
The AI wave has not merely created new products. It has minted trillions of dollars in market value and transformed a handful of technology firms into wealth-compounding machines. Investors in the US, Taiwan, South Korea and increasingly China have participated in one of the most dramatic wealth creation cycles in recent memory.
India, meanwhile, has largely watched from the sidelines. The technological minds of India failed to make any meaningful impact in the AI space, and as a bystander, have been watching the US and other Emerging Nations stealing the show.
AI is not just a software story; it’s more about semiconductors
Many believed AI winners would only be software companies. Instead, the biggest wealth creation happened among companies making chips, memory, servers and AI infrastructure.
AI requires massive computing power, requires GPUs, memory chips, semiconductor manufacturing and cloud infrastructure.
That chain created an economic supercycle.
As per the Wall Street Journal, worldwide cloud infrastructure revenues are now approaching a $500 billion annual run rate and are expected to exceed the $500 billion mark in 2026, driven largely by AI workloads and data-centre expansion. AI spending has become an infrastructure arms race.
Nvidia: the poster child of AI wealth creation
No company symbolises AI wealth creation better than Nvidia.
Two years ago, market cap was around $2 trillion. It subsequently crossed the $4–5 trillion zone, surpassing the total market cap of all listed Indian companies. AI chip demand transformed Nvidia from a graphics-card company into the backbone of global AI computing.
Nvidia became the “arms dealer” of AI. Every major AI company buys Nvidia chips. Hyperscalers like Microsoft, Amazon, Google and Meta are spending billions to secure supply.
This resulted in extraordinary shareholder wealth multiplication for its investors. In the last 5 years the stock has grown 1440%.
Thanks to the AI giants of the US, the has delivered 37% in the last 1 year as on 19th May’26 when India’s Nifty 50 is down 4.15% and the tech Index of the country Nifty IT is down 21.72%. The 5 year absolute return of Nifty IT is 12.71% when the Nasdaq 100 delivered 116%.
Taiwan quietly became one of AI’s biggest winners
If Nvidia designs the brains, Taiwan builds them. The star is Taiwan Semiconductor Manufacturing Company().
TSMC manufactures chips for Nvidia, Apple, AMD, Qualcomm and several AI startups.
TSMC crossed the $1 trillion valuation mark just in July 2024, and in under 2 years, its market cap has surged to $1.8 trillion. It revised its long-term semiconductor market projections upward because of AI demand.
Taiwan’s nominal GDP is just about $970 billion, which means the current market cap of TSMC is twice the country’s nominal GDP.
Taiwan’s stock market capitalisation surged sharply, driven largely by semiconductor leaders. TSMC weightage is 57% is MSCI Taiwan Index. This is the multiplier effect of having a globally dominant technology champion. The Taiwan Weighted Index delivered 86% in the last 1 year and absolute 150% in the last 5 years.
Korea’s Samsung and SK Hynix – AI’s unexpected superstars
The biggest surprise of the AI cycle has been memory chips.
AI systems require High-Bandwidth Memory (HBM), and Korea dominates this market. The space is ruled by the two giants, Samsung Electronics and SK Hynix. Samsung and SK Hynux together account for 42% of the Korean Index KOSPI.
Samsung and SK Hynix together generated nearly $59.7 billion in profit in the March’26 quarter, which exceeds the combined quarterly profit of all listed Indian companies in any quarter so far.
AI-driven memory demand has also pushed Samsung into the trillion-dollar valuation club and turned SK Hynix into one of the world’s hottest AI trades.
Even more remarkably, SK Hynix was once posting losses until it ventured into AI.
Thanks to these 2 wealth multiplier stocks, the KOSPI has delivered 24% and 80% in absolute returns in the last 3 and 6 months, respectively. The Index has returned 177% in the last 1 year. From May’22 to May’ 25 the index delivered Nil return but has more than covered up in the recent one year.
One of the most important investing lessons from the AI cycle is that you don’t need hundreds of winners. Just a couple can do all the heavy lifting.
China gives run for the money for the US
China is quickly expanding its homegrown AI capabilities and has become a formidable competitor to US peers through its affordable AI models. China has built a strong ecosystem of , semiconductor equipment companies, cloud leaders, and large language model developers.
The Chinese government is pursuing a bold, state-led effort to establish itself as a global leader in artificial intelligence by 2030, linking technological independence with economic expansion. Through programs such as the “AI Plus” initiative and long-term economic planning, Beijing is emphasizing swift commercialization, self-sufficiency in semiconductors, and improved workforce productivity.
Chinese technology firms are investing aggressively to reduce dependence on foreign chips. China’s AI ambitions are increasingly moving from imitation toward self-reliance.
Chinese companies in the AI sector, such as Alibaba, Tencent Holdings, Baidu, Cambricon Technologies (often referred to as the Nvidia of China), ECarx, and Xiaomi Corp, have significantly increased shareholder value.For investors, this means future AI wealth creation may broaden beyond Silicon Valley.
AI companies are investing in one another and creating valuation acceleration
Unlike previous technology cycles, AI leaders are also funding each other. The ecosystem is deeply interconnected:
- OpenAI received an initial $1 billion investment from Microsoft in 2019, which has since grown to around $13–14 billion. This has helped propel OpenAI’s valuation from approximately $29 billion in 2023 to potentially hundreds of billions, making it one of the most valuable private tech companies globally.
- Anthropic has benefited as well, with Amazon investing about $8 billion so far and having the potential for even greater commitments. Google has become a major backer of Anthropic, committing $10 billion upfront and offering the option for an additional $30 billion based on milestones.
- Meanwhile, Nvidia has expanded its role from chip supplier to ecosystem investor, acquiring stakes in AI startups and infrastructure, which reinforces demand for its products. Nvidia has also participated significantly in OpenAI’s latest funding rounds.
The result is a self-reinforcing AI flywheel where companies are not just creating products; they are collectively creating one of the largest wealth-creation ecosystems in technology history.
This explains why private AI valuations are reaching levels that once looked unimaginable.
India’s opportunity loss may be larger than many realize
The biggest issue for India is not that the country lacks software talent.
It lacks a dominant AI platform or semiconductor champion.
India has strong IT services firms, digital adoption and startup talent but wealth multiplication in AI globally has come from semiconductor IP, advanced manufacturing, foundational AI models, GPU infrastructure and AI platforms.
India currently lacks a home-grown Nvidia, TSMC, OpenAI or SK Hynix equivalent.
That has consequences. Without a large AI champion benchmark indices miss AI upside, investors lose exposure to global wealth creation, foreign capital flows elsewhere and the spillover benefits remain limited.
The AI cycle has demonstrated that one dominant technology leader can create enormous national wealth.
India’s challenge is no longer digital adoption. It is technological ownership.
Indian investors moving to greener pastures
The question for investors is not whether AI changes industries, as it already has.
The question is whether India can produce the companies that own the next wave rather than simply consume it. The biggest risk may not be investing in AI too early. It may be missing the platform shift altogether.
Indian investors have increasingly realised that waiting for a domestic AI giant may be futile, and in recent months have begun gaining exposure to global AI leaders through direct stock investments and global funds. The changing investor preference is evident from the net inflows by Indian investors in overseas Fund of Funds. Overseas FoFs attracted net inflows of ₹2,597 crore in 2025, while in the first four months of 2026 alone, the category saw inflows of ₹3,977 crore.
A recent report by Motilal Oswal Financial Services gives the impact of AI stocks on the market cap of large global markets. The report takes into account the data from Calendar Year 2024 to 2026 YTD. As per the report, the collective market cap of AI stocks of the US grew by CAGR of 24% during this period, the ex-AI market cap grew by just 11% and the total market cap grew by 16%. This clearly points out the dominance of AI stock. For China the numbers are 16% CAGR for AI stocks, ex-AI 38% and total market cap growth was 35%. For Taiwan it is a mammoth 69% for AI, just 4% for ex-AI and total 25%. For Korea it’s a staggering 101% CAGR for AI, 24% ex-AI and 35% on the whole. For India, the numbers are terrible for the same period. For IT Services it is -34%, ex-IT Services -1% and total -4%. While this shows the weakness of India in AI, the message hidden under the carpet is also the spread of Indian markets across sectors, unlike for markets like Taiwan where without AI the market has very little to offer.
The uncomfortable reality is that the advantage India enjoyed in the IT revolution does not automatically translate into leadership in artificial intelligence. Unless India rapidly invests in research, talent retention, compute infrastructure, and globally competitive AI product companies, it risks becoming a back-office integrator in the biggest technological revolution of this century, rather than one of its architects.
Hope we soon see the AI clones of Infosys and TCS, which created massive value for investors.
The author is Director, Dhanavruksha Financial Services Pvt. Ltd. Views expressed are personal.