Why Indian AI Startups Are Facing New Risks After Anthropic Withdraws Fable 5: Explained

Anthropic’s abrupt withdrawal of its advanced AI model Fable 5 has sent shockwaves through India’s startup ecosystem.The move, reportedly following directions from the Trump administration citing national security, has exposed a critical vulnerability: many Indian AI companies build applications on top of foreign foundational models and do not control the underlying technology.With Indian AI startups raising just $860 million compared to $129 billion in the US, the dependency on US providers like Anthropic, OpenAI, and Google is now under sharp focus.