India Moves to Build Military AI at Home: Report

Sarvam and other domestic AI model developers are in advanced talks with India’s defense ministry to help set up a ₹300-crore about ($3.2 million) Center of Excellence aimed at building indigenous AI capabilities for military use, The Economic Times reported, citing people familiar with the discussions.

The proposed Center would focus on developing AI systems trained on India’s operational environment, including terrain and climate, to support surveillance, reconnaissance, and military decision-making, the report said.

The move fits a broader push to reduce reliance on foreign AI systems in sensitive sectors such as defense.

The initiative comes as governments place greater emphasis on AI as a military tool, particularly in intelligence, surveillance, cybersecurity, and operational planning.

The Pentagon’s standoff with Anthropic over military AI use illustrates the stakes: the Department of Defense declared Anthropic a supply chain risk in early March, after the two sides failed to agree on terms governing the use of Claude, with Anthropic seeking assurances its technology would not be used for fully autonomous weapons or domestic mass surveillance, and the Pentagon demanding unfettered access for all lawful purposes.

Anthropic lost an appeals court bid to temporarily block the Pentagon blacklisting.

India has backed its own strategic push with a record ₹7.85 trillion (about $84 billion today) defense allocation for FY2026-27, up 15.19% from the previous year’s budget estimate, the highest share of central government expenditure among all ministries.

The government also raised DRDO’s allocation to ₹29,100.25 crore, including ₹17,250.25 crore for capital expenditure, up from ₹26,816.82 crore in FY2025-26.