Smarter AI, Not Just Larger: Developing India’s Strategy Amid the Global Scaling Debate

Ayndri

Research Analyst - Policy & Advocacy, CyberPeace

PUBLISHED ON

Aug 25, 2025

Introduction

The ongoing debate on whether AI scaling has hit a wall has been rehashed by the underwhelming response to OpenAI’s ChatGPT v5. AI scaling laws, which describe that machine learning models perform better with increased training data, model parameters and computational resources, have guided the rapid progress of Large Language Models (LLMs) so far. But many AI researchers suggest that further improvements in LLMs will have to be effected through large computational costs by orders of magnitude, which does not justify the returns. The question, then, is whether scaling remains a viable path or whether the field must explore new approaches. This is not just a tech issue but a profound innovation challenge for countries like India, charting their own AI course.

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The Scaling Wall: Gaps and Innovation Opportunities

Escalating costs, data scarcity, and diminishing gains mean that simply building larger AI models may no longer guarantee breakthroughs. In such a scenario, LLM developers will have to refine new approaches to training these models, for example, by diversifying data types and redefining training techniques.

This global challenge has a bearing on India’s AI ambitions. For India, where compute and data resources are relatively scarce, this scaling slowdown poses both a challenge and an opportunity. While the India AI Mission embodies smart priorities such as democratising compute resources and developing local datasets, looming scaling challenges could prove a roadblock. Realising these ambitions requires strong input from research and academia, and improved coordination between policymakers and startups. The scaling wall highlights systemic innovation gaps where sustained support is needed, not only in hardware but also in talent development, safety research, and efficient model design.

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Way Forward

To truly harness AI’s transformative power, India must prioritise policy actions and ecosystem shifts that support smarter, safer, and context-rich research through the following measures:

Driving Efficiency and Compute Innovation: Instead of relying on brute-force scaling, India should invest in research and startups working on efficient architectures, energy-conscious training methods, and compute optimisation.
Investing in Multimodal and Diverse Data: While indigenous datasets are being developed under the India AI Mission through AI Kosha, they must be ethically sourced from speech, images, video, sensor data, and regional content, apart from text, to enable context-rich AI models truly tailored to Indian needs.
Addressing Core Problems for Trustworthy AI: LLMs offered by all major companies, like OpenAI, Grok, and Deepseek, have the problem of unreliability, hallucinations, and biases, since they are primarily built on scaling large datasets and parameters, which have inherent limitations. India should invest in capabilities to solve these issues and design more trustworthy LLMs.
Supporting Talent Development and Training: Despite its substantial AI talent pool, India faces an impending demand-supply gap. It will need to launch national programs and incentives to upskill engineers, researchers, and students in advanced AI skills such as model efficiency, safety, interpretability, and new training paradigms

Conclusion

The AI scaling wall debate is a reminder that the future of LLMs will depend not on ever-larger models but on smarter, safer, and more sustainable innovation. A new generation of AI is approaching us, and India can help shape its future. The country’s AI Mission and startup ecosystem are well-positioned to lead this shift by focusing on localised needs, efficient technologies, and inclusive growth, if implemented effectively. How India approaches this new set of challenges and translates its ambitions into action, however, remains to be seen.

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References

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PUBLISHED ON

Aug 25, 2025

Related Blogs

#FactCheck - Viral Photos Falsely Linked to Iranian President Ebrahim Raisi's Helicopter Crash

June 6, 2024

Executive Summary:

On 20th May, 2024, Iranian President Ebrahim Raisi and several others died in a helicopter crash that occurred northwest of Iran. The images circulated on social media claiming to show the crash site, are found to be false. CyberPeace Research Team’s investigation revealed that these images show the wreckage of a training plane crash in Iran's Mazandaran province in 2019 or 2020. Reverse image searches and confirmations from Tehran-based Rokna Press and Ten News verified that the viral images originated from an incident involving a police force's two-seater training plane, not the recent helicopter crash.

Claims:

The images circulating on social media claim to show the site of Iranian President Ebrahim Raisi's helicopter crash.

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Fact Check:

After receiving the posts, we reverse-searched each of the images and found a link to the 2020 Air Crash incident, except for the blue plane that can be seen in the viral image. We found a website where they uploaded the viral plane crash images on April 22, 2020.

According to the website, a police training plane crashed in the forests of Mazandaran, Swan Motel. We also found the images on another Iran News media outlet named, ‘Ten News’.

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The Photos uploaded on to this website were posted in May 2019. The news reads, “A training plane that was flying from Bisheh Kolah to Tehran. The wreckage of the plane was found near Salman Shahr in the area of Qila Kala Abbas Abad.”

Hence, we concluded that the recent viral photos are not of Iranian President Ebrahim Raisi's Chopper Crash, It’s false and Misleading.

Conclusion:

The images being shared on social media as evidence of the helicopter crash involving Iranian President Ebrahim Raisi are incorrectly shown. They actually show the aftermath of a training plane crash that occurred in Mazandaran province in 2019 or 2020 which is uncertain. This has been confirmed through reverse image searches that traced the images back to their original publication by Rokna Press and Ten News. Consequently, the claim that these images are from the site of President Ebrahim Raisi's helicopter crash is false and Misleading.

Claim: Viral images of Iranian President Raisi's fatal chopper crash.
Claimed on: X (Formerly known as Twitter), YouTube, Instagram
Fact Check: Fake & Misleading

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The Murky Illusion: Online Gambling and Cyber-Security Issues

February 28, 2024

Introduction

As the world is being "Digitally Interlaced", cyber security has become a continuous wrangle. The “Gambling industry” is considered an incredibly lucrative mark for cybercriminals, principally due to the enormous quantities of cash on hand and the sensitive details it processes day to day. Cybercriminals may use susceptibilities in gambling scaffolds to achieve financial scams or launder unlawful funds. An analysis by Security Scorecard discovered that the online gambling industry was ranked third in the possibility of encountering a cyber attack, following the energy and financial services sectors. Similarly, Online gambling is a bending matter that demands meticulous contemplation by policymakers and nationals. The incredible rise of online gambling has led to a terse acclivity in unlawful activities such as online scams, fraud, etc. Also, online sports gambling has become a thriving endeavour in contemporary years as millions of people are putting stakes and gambles on their electronic devices.

The Challenges

Online gambling has thus become a widespread frolicking for numerous youngsters, with the industry tossed to be worth billions of dollars in the forthcoming decades. The prominent cyber security challenges in the gambling industry are money laundering, financial laundering, ransomware, personal information theft, data breaches, distributed Denial of Service (DDoS), system disruptions and Insider perils and employee malfeasance. Challenges of online gambling also include being properly not regulated and a lack of social interaction with near and dear ones. The spread of Internet gambling has presented many problems affecting consumer behaviour online, motivations to gamble, problem gambling, security of websites, and the righteousness and virtue of the games. The rise of online gambling among young people due to the lack of clear regulations has likewise produced an abundant backdrop for financial ruination.

Web games and betting are among the fastest-evolving areas of the Internet. Over the past several years, there has been an international flare-up in online gambling, permitting customers to play from the convenience of home, work, and public locations. Numerous offshore betting websites and apps usually permit parties to win in the start with sound returns, whereas after the user gets addicted and invests considerable sums, they either keep failing or have the website refuse to cash out the winnings. Also, the information demonstrates that online games have been employed to commit wrongdoings (Child sexual exploitive material, religious conversion, cyberbullying, fraud, betting in virtual online casinos, etc.)

India's laws and regulations surrounding online gambling are complex and constantly evolving. While the legal framework is not entirely clear, a few state in India have their own set of rules.

Recently In April 2023, the Union Ministry of Electronics and Information Technology (“MeitY”), by virtue of the rule-making powers available to the central government under the Information Technology Act, 2000 (“IT Act 2000”), implemented a new central legal framework for online gaming through amendments to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (“IT Rules 2021”). These amendments (“Online Gaming Rules”) propose a light-touch, co-regulatory regime whereby MeitY-recognised, independent self-regulatory bodies (“SRB”) will verify whether an “online real-money game” is to be made available to the general public or not – in accordance with the baseline criteria prescribed by the Online Gaming Rules.

The Online Gaming Rules attempt to regulate online gaming platforms by treating them as an “online gaming intermediary” (“OGI”) and prescribing intermediary due diligence obligations for them under the IT Rules 2021. An OGI has been defined in the Online Gaming Rules as “any intermediary that enables the users of its computer resource to access one or more online games”. Under the Online Gaming Rules, an online game can be a “permissible online game” if (i) it is not an online real-money game, or (ii) it is an online real-money game but is “verified” by an SRB in accordance with the baseline criteria prescribed by the Online Gaming Rules and any additional criteria prescribed by the SRB itself.

Global Perspective

The global gaming industry worth over US$227 billion in 2022 is further projected to grow to US$312 billion by 2027. Several countries have set regulatory frameworks about online gaming, though these are skewed, concentrating mainly on gambling and circumventing numerous of the more typical cyber threats. The US spends about $60 billion annually on online gambling and sports betting. In Europe, gambling is an even larger moneymaker. Also, numerous countries in Europe, like the UK, have legalised gambling. Nevertheless, it is prohibited for a US based company to operate an online gambling site. Yet, sports betting online is permitted in some states.

Today, though the gaming market has been overpowered by China and the US, future growth in the sector is anticipated to come from emerging economies like India with increasing populations. The permitted status of online gambling in India is nonetheless imprecise, vamoosing space for exploitation by cyber criminals and disarray for players involved. One of the climactic points that ought to be addressed is the sudden upsurge of online games, which increases gambling. Skill-based games such as poker, rummy etc., have additionally been developed to circumvent the legal definition of gambling in India. The recent instances of the online gaming industry not being properly regulated have also come to light in India. For instance, the Enforcement Directorate (ED) is still investigating the vast Mahadev Online Betting scandal, exposing an unknown money laundering method using Unified Payment Interface (UPI) IDs. Also, the Cyber Cell in Agra has taken proactive action against copyright violations, illegal online gambling and betting activities, shutting down 27 Illegal cricket betting sites in major operations, safeguarding several lakhs of Indians with thousands of crores from being transferred to overseas shores principally China.

Consequently, though India has announced new regulations on online gaming, its contemporary policy framework cannot contend with the problems endangering this sector. The Public Gambling Act of 1867 makes it unlawful to use a public gambling house or to be seen in one. Nevertheless, the act does not explicitly cite online gambling, leading to further interpretation. The Ministry of Home Affairs (MHA) has released a further awareness campaign for offshore illegal gambling apps, notifying users to be mindful of foreign apps as they may be fraudulent and might induce monetary damage to the user. Also, state laws control gambling in India with each state having its own directive on the subject. Yet, the Supreme Court of India has maintained that skilled games are not gambling and are thus legal. Furthermore, the Information Technology (IT) Act, of 2000 does not precisely handle online gambling or games that enable gambling.

Today, developers have strived for new ways to monetise the growing popularity of online gaming, which oversaw the creation of in-game currencies that can be bought using actual money, usually through credit cards. Several nations have prohibited the usage of in-game currency and loot boxes, considering them a kind of online gambling. The in-game currency has thus caused much disagreement about becoming a state of hunting monetisation by developers, especially targeting minor or newbie players. The gambling industry, therefore, faces unique cybersecurity challenges that require a comprehensive and proactive approach to cybersecurity.

Conclusion

Presently, there are approximately 3.09 billion active video game players worldwide, and the number is expected to reach 3.32 billion by 2024 as of 2023. In the contemporary digital era, information is priceless, and encryption acts as a necessary means to safeguard it. Thus, Regulators are working to maintain the swiftness of shift in the industry, as the dearth of transparency in the law has made it challenging to implement regulations. There is also less awareness about cyber security in India due to the following grounds such as the lack of ethical hackers in the country, companies in India lacking focus on cyber security and hiring a team of ethical hackers and cyber security experts. Furthermore, there has been a lack of knowledge among the citizens as well.

It is essential to realise the conceivable social and economic consequences and take measures to handle the online gambling industry. The industry has thus been undersized in the mode of research following online crime and Internet gambling, even though it is an acute emphasis. There is also a pressing necessity to rebuild these regulations to tackle the more unbridled cyber security hazards swarming the gaming industry. Similarly, there is an urgent need for governments and policymakers around the world to start paying more attention to the gaming industry as cyber security threats continue to rise. There should be a further need to strengthen the regulatory framework, establish Self Regulatory Organizations (SROs), create ethical gaming designs and increase awareness among gamers. The Government of India should consider devising its own rating system to rate games so that players under 18 cannot access them.

Eventually, cyber security is a shared commitment, and everyone in the online gambling ecosystem must function jointly to provide a secure and safe setting for all.

References:

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Juice jacking

October 20, 2023

Introduction:

Cybercriminals can hack your phone using or exploiting some public charging stations such as at airports, Malls, hotel rooms, etc. When you plug in your phone or laptop devices into a power charger using USB, you may be plugging into a hacker. Juice jacking poses a security threat at public charging stations at airports, shopping malls and other public places that provide free charging stations for mobile, tablet, and laptop devices.

Cybercriminals can either hack into the public charging spot or download malware or viruses through the USB port into your system. When you plug your phone, laptop, tablet or other such devices for charging at public charging stations, it can download malware to your phone and other such devices, and then hackers can access your personal information or passwords, It is really a problem since hackers can even get access to your bank account for unauthorised transactions by accessing your passwords and personal information.

Hence it is important to think twice before using public charging spots, as it might lead to serious consequences such as malware, data leak and hacking. Hacking can gain unauthorised access to your personal information by installing malware in your device and they might monitor your device by installing monitor software or spyware to your device. This scam is referred to as juice jacking.

FBI issued an advisory warning about using public charging stations:

The Federal Bureau of Investigation (FBI), In May 2023, advised users to avoid using free charging stations in airports, hotels, or shopping centres. The warning comes as threat actors have figured out ways to inject malware into devices attached to publicly installed USB ports.

Updated Security measures:

We all must have seen public charging points such as airports, shopping malls, metro, and other public places that provide charging stations for mobile devices. But it can be a threat to your stored data on your device. During the charging process, your data can be transferred which can ultimately lead to a data breach. Hence utmost care should be taken to protect your information and data. iPhones and other devices have security measures in place, When you plug your phone into a charging power source, a pop-up appears to ask permission to allow or disallow the transfer of Data. There is also a default setting in the phones where data transfer is disabled. In the latest models, when you plug your device into a new port or a computer, a pop-up appears asking whether the device is trusted or not.

Two major risks involved in the threat of Juice jacking:

Malware installation: – Malware apps can be used by bad actors to clone your phone data to their device, Your personal data is transferred leading to a data breach. Some types of malware include Trojans, adware, spyware, crypto-miners, etc. Once this malware is injected into your device, It is easy for cybercriminals to extort a ransom to restore the information they have unauthorized access to.
Data Theft: It is important to give emphasis to the question of whether your data is protected at public charging stations? When we use a USB cable and connect to a public charging station port, cyber-criminals by injecting malware into the charging port system, can inject the malware into your device or your data can be transferred to the bad actors. USB cords can be exploited by cybercriminals to commit malicious activities.

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Best practices:

Avoid using public charging stations: Using public charging stations is not safe. It is very possible for a cybercriminal to load malware into a charging station with a USB cord. Hence It is advisable not to use public charging spots, try to make sure you charge your phone, and laptop devices in your car, at home or office so it will help you to avoid public charging stations.
Alternative method of charging: You can carry a power bank along with you to avoid the use of public charging stations.
Lock your phone: Lock your phone once connected to the charging port. Locking your device once connected to the charging station will prevent it from being able to sync or transfer data.
Software update: It is important to enable and use your device’s software security measures. Mobile devices have certain technical protections against such vulnerabilities and security threats.
Review Settings: Disable your device’s option to automatically transfer data when a charging cable is connected. This is the default on iOS devices. Android users should disable this option in the Settings app. If your device displays a prompt asking you to “trust this computer,” it means you are connected to another device, not simply a power outlet. Deny the permission, as trusting the computer will enable data transfers to and from your device. So when you plug your device into a USB port and a prompt appears asking permission to "share data" or “trust this computer” or “charge only,” always select “charge only.”

Conclusion:

Cybercriminals or bad actors exploit public charging stations. There have been incidents where malware was planted in the system by the use of a USB cord, During the charging process, the USB cord opens a path into your device that a cybercriminal can exploit, which means the devices can exchange data. That's called juice jacking. Hence avoid using public charging stations, our safety is in our hands and it is significantly important to give priority to best practices and stay protected in the evolving digital landscape.

References:

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Smarter AI, Not Just Larger: Developing India’s Strategy Amid the Global Scaling Debate

Introduction

The Scaling Wall: Gaps and Innovation Opportunities

Way Forward

Conclusion

References

Related Blogs

Executive Summary:

Claims:

Fact Check:

Conclusion:

Introduction

The Challenges

Global Perspective

Conclusion

References:

Introduction:

FBI issued an advisory warning about using public charging stations:

Updated Security measures:

Two major risks involved in the threat of Juice jacking:

Best practices:

Conclusion:

References:

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