Extraordinary tech power can backfire without legal clarity: India must seize the day and set the pace

While artificial general intelligence is expected to become the norm, a host of newer super technologies have queued up at the beta stage. As all these come together, a new sense of power is being unleashed. But unbridled power can be dangerous.

As the difference between science fiction and reality blurs, it is worthwhile to recall a life lesson given to Peter Parker on becoming Spiderman: “With great power comes great responsibility." Today, that means framing the right laws to protect and provide for businesses and society.

As a new world takes shape, one must examine the dimensions that define it. Taking into account all the thrills, fears, opportunities and threats in store, these dimensions can broadly be classified as follows:

The relationship between innovation and transformation: A simple analogy can define this relationship. What speed is to physics, technology-driven scale and value are to new-age businesses. A shining example of speed, scale and value is Nvidia, which became the world’s first company ever to reach $4 trillion in market capitalization, surpassing other Big Tech firms.

This US-based company’s success can be attributed to soaring demand for the AI chips that it designs and sells. There are many more companies reporting similar leaps in scale and value, with technology driving their success.

While AI is undoubtedly the brightest shining star in the tech-verse, it is part of a string of emerging technologies that form a broader constellation of stars. The World Economic Forum in its Top 10 Emerging Technologies of 2025 report has listed innovations that have the potential to completely redesign industry and society.

Against this background, a new breed of ‘frontier firms’ has emerged that use a mixed labour force of human employees and AI agents. Microsoft describes these digital workers as “intelligence on tap," signifying their ability to cater to precise intelligence needs. Apart from offering analytical capabilities, these ‘digital colleagues’ can work tirelessly around the clock, thus amplifying a company’s capacity without adding to its headcount.

This approach, however, entails a social cost, as it could increase human unemployment and its related ailments. The law must catch up with this transformation, not only to develop trust in the system, but also to provide solutions for its fallout on society.

Law and ethics as guides of digital capital formation: Innovation is best carried out without barriers, but it risks faltering without a structure. Law is the institutional framework that converts ideas into sustainably investable assets, providing clarity to entrepreneurs and investors.

India could be at the world’s forefront of creating a progressive framework of law and ethics. Recall that our homegrown digital public infrastructure found pride of place in the Bletchley Declaration of 2023 that addressed many facets of AI. This highlighted India’s growing international influence over technology policies.

Yet, a staggering number of tech-driven startups operate in legal grey zones. As of today, many innovative business ventures are far ahead of the guidance provided by law. This is evident in the e-commerce industry, where entities struggle with ambiguity in inventory-based and marketplace models.

India has the third-largest startup ecosystem in the world and startups need protection from the fate that befell the online gaming industry. The abrupt collapse of money-based online gaming not only wiped out billion-dollar ideas in the blink of an eye, it was also a stark reminder that innovation without regulation can be fragile.

Businesses and legal frameworks are part of the same ecosystem. They are not parallel tracks. Without clarity on intellectual property, the data governance framework, liability standards and so on, we cannot sustain investor confidence. This is a non- negotiable condition in the digital economy; certainty of regulation is a sine qua non for both entrepreneurs and investors.

Mindset for navigating ambiguity: In a world marked by legal ambiguities and volatile geopolitics, entrepreneurship is not for the faint-hearted. For India’s new-age entrepreneurs, grit is the compass that will help their businesses stay the course. India’s chaotic and high-stakes environment will reward those who are innovative, not reckless; vigilant and resilient, not brittle; optimistic, not foolhardy; humble, not brash; and ambitious and agile, not slothful.

All the above dimensions show that the fundamentals of value creation are being rewritten and a new economic order is unfolding. Why else would the digital economy—supercharged by AI and other technologies—emerge as the fastest growing segment globally?

For Indian innovations to flourish in this unpredictable landscape, we must provide a legal and ethical scaffolding. India has already proven its rule-writing prowess through digital public infrastructure; it must now come forward to help convert pioneering ideas into enduring assets of global value.

Carpe diem, India!

The author is managing partner, Cyril Amarchand Mangaldas.