Anthropic's next big opportunity: Experts see India as a potential growth market if US shuns the AI firm

Tensions between Anthropic and the US Department of Defense have intensified after the Pentagon labelled the AI startup a “supply chain risk”, effectively barring the use of its models in defence-related work.

The remarks followed Anthropic's refusal to back down over safeguards which prevent its technology from being used to conduct US domestic surveillance and to programme autonomous weapons which can hit targets without requiring any human intervention.

The dispute prompted the Claude-maker to file a lawsuit against the US Department of Defense, arguing that the Trump administration’s declaration of the company as a US supply-chain risk could significantly hurt its business.

According to a Bloomberg report, Anthropic PBC told a judge that it could even lose as much as billions of dollars in revenue this year due to the designation.

The dispute has since drawn attention across the tech industry, with several companies, including Microsoft, and researchers voicing support for the AI firm.

India can be a ‘huge market’ for Anthropic

Amid its dispute with the US government, Anthropic could find a significant growth opportunity in India, which experts say offers both a vast market for artificial intelligence and a deep pool of talent.

“Strategically, not only is India a huge market, it also has the largest pool of skilled engineers and mathematicians to work on AI. The Government of India has a fantastic opportunity to make some hard-to-ignore offers to Anthropic and ensure them a conducive environment to shift to India,” Saikat Datta, the co-founder and CEO of DeepStrat, told Livemint.

Calling the move a potential “game changer” for both India and Anthropic, Datta outlined several steps the Indian government could take to attract the company if the US shuns it. "Give land, skilled engineers, subsidise or declare a tax holiday, and subsidise compute. But just build one clause — what you build will have joint ownership,” he said, referring to what India could offer.

Meanwhile, Samuel Dare, the core contributor of Covenant AI, said that “India is an obvious candidate on paper as it has the second largest Claude user base, a government actively deploying capital to build AI infrastructure, and the political will to position itself as a serious AI sovereign.”

However, he cautioned against viewing this as a solution. “Anthropic would remain a centralised, privately held American company, subject to US export controls, dependent on the same hyperscaler infrastructure, and vulnerable to the same kind of executive pressure that created this crisis. India would gain hosting capacity without gaining sovereignty.”

Will a deal with India offset the impact of US govt blacklist?

India ranks second globally in consumer usage for Claude AI, second only to the US, Anthropic said in its Economic Index Report published in October. The AI startup had also opened its first office in Bengaluru this year.

However, the question remains whether such a move would help Anthropic offset the impact of a potential blacklist by the United States government.

“It will not immediately offset the loss of cancelled Pentagon contracts. But Pentagon contracts could also reduce the confidence of other governments worried about sovereignty and security. Anthropic could position itself to build a much bigger market by leveraging current geo-politics in its favour,” Datta pointed out.

Will US-Anthropic tensions affect individual users?

The dispute between the US Pentagon and Anthropic is unlikely to affect enterprise clients or individual users of its AI chatbot Claude.

The impact is expected to be limited to companies that supply technology or services to the US federal government and depend on such contracts, according to Mishi Choudhary, the Founder and CEO of SFLC.IN.

“We will have to watch the outcome of the legal challenge here to understand the full impact. In the meantime, this has created immense marketing benefit for Anthropic which has emboldened its image as a company standing up for ideals,” Choudhary said.