A New India Is Here, And It Wants To Make Things

If you’re lucky enough to stay at the Taj Falaknuma Palace in Hyderabad, you can walk out of the Nizam’s former study and onto a balcony and then take in the entire city. The palace sits atop a hill near the old parts of town, and the multitudes of neighboring mosques create a surround-sound effect during the calls to prayer. Farther off (through the smoggy air) lies the tech center of Hyderabad, packed with its towering, modern offices that speak to the software outsourcing, services, and call center operations that helped fuel India’s vast and powerful technology economy.

Much of what you can see from the hotel is now under threat, as the rise of AI technology seems quite bad for the core of India’s technology industry. Artificial intelligence agents that can code and handle customer service tasks undermine a lot of what makes this place tick. That fear has contributed to a massive decline in Indian technology stocks over the past year. People have bet that cheap, smart labor will not be able to compete with ever-improving AI agents and that the Indian tech giants of yesteryear will fall and fall hard.

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The hope in this country then lands on a new generation of startups. There are companies like Ather, Airbound, Alteon and Aspera Industries – just to do the As – that represent a fresh take on the Indian technology scene that few people outside India have noticed. These are hardware companies trying to build machines unlike anything built elsewhere, and, if you believe the most optimistic people here, they’re meant to turn India into a true hard-tech innovator and help the country better compete with the likes of China and the United States in the decades to come.

Let’s start with Ather Energy. It was founded in 2013 and initially planned to build low-cost Stirling engines that could be fueled by agricultural waste and bring power to rural India. The company, though, changed course and began making all-electric, two-wheeled scooters. It would be easy to argue that it’s now the most innovative scooter producer in the world, and Ather’s business is booming. The company is expanding its manufacturing lines to produce more than 1 million scooters per year.

I toured Ather’s facilities a couple of weeks back with the company’s CEO and co-founder Tarun Mehta and saw a factory full of young, hard-working people assembling one machine after another. Ather now sells three flavors of scooters – low-cost, sporty and comfort – and they start at about $1,000. The scooters are well-engineered, with Ather working in-house on the frame, motor controllers, battery packs and software, and they’re also very good-looking. Like Tesla, Ather has been building out its own charging network in India and keeps adding features like pothole detection to its software so that the machines get better after you buy them.

Ather went public in India last year and is now worth almost $7 billion. This is both a loss and a win for India.