Anthropic's suspension of access to new AI models for foreign nationals has triggered India's debate over whether the country can rely on U.S.-controlled AI technology or must build its own.

What happened: Anthropic said it received a U.S. government directive requiring it to suspend access to its recently launched Fable 5 and Mythos 5 models for all foreign nationals, including its own foreign national employees. The announcement came shortly after Anthropic announced a partnership with Tata Consultancy Services to expand enterprise AI adoption in India.

Why it matters: India is Anthropic and OpenAI's second-largest market after the U.S., and the suspension has exposed the risk that access to critical AI systems can be controlled by geopolitical decisions outside India's control. Indian founders and investors are now questioning whether the country can afford to depend on a small number of foreign frontier AI providers, especially when teams span multiple countries and may face competitive disadvantages if they lack U.S. citizenship.

What to watch: Policy leaders are calling for ambitious domestic action—investor Mohandas Pai has proposed a ₹500 billion (about $5 billion（約8000億円）) annual fund for AI and deep tech alongside a ₹2 trillion (around $21 billion（約3.4兆円）) credit guarantee program for cloud infrastructure and semiconductors. This would dwarf India's existing IndiaAI Mission, which has an outlay of ₹103.72 billion (about $1.2 billion（約1900億円）) over five years.