Governments Want Equity in AI Now, From Delhi to Washington

India’s government is about to own a piece of a private AI startup for the first time, and it isn’t writing a check to do it. The Centre is on track to hold a 1% to 2% stake in Sarvam AI, the Bengaluru-based startup now valued at $1.5 billion, by converting a subsidized GPU compute deal into shares. Half a world away, OpenAI has offered Washington a much larger 5% slice of itself, worth roughly $42.6 billion, to help seed a public wealth fund.

Neither government set out to nationalize artificial intelligence. Both are ending up as shareholders anyway, inside the same six week stretch, because the same anxiety is driving each of them: whoever doesn’t own a piece of frontier AI ends up renting its future from whoever does.

India’s GPU Subsidy Just Became an Equity Stake

The mechanism is unusual. Sarvam received access to 4,096 Nvidia H100 GPUs for six months under the IndiaAI Mission, running up a compute bill of ₹246.71 crore. The government covered ₹98.68 crore of that, roughly 40% of the total, and The Economic Times first reported the arrangement on June 25.

That subsidy did not arrive as a grant. It came as compulsorily convertible debentures (CCDs, a debt instrument that must turn into equity rather than get repaid in cash). Sarvam’s ongoing Series B round is the trigger that converts them. The startup raised $234 million in the round’s first close on June 15, at a post-money valuation of $1.5 billion, with HCLTech contributing $150 million for what other reporting puts at a 10.46% stake. Once the round finishes closing, the CCDs convert too, and the government ends up holding between 1% and 2% of the company.

The Centre will be taking a small stake in Sarvam.

An unnamed government official told The Economic Times that support extended under the IndiaAI Mission has to be accounted for in some form, even when it isn’t cash.

HCLTech’s chief executive, C Vijayakumar, called the investment a step toward building “India’s trusted and globally competitive AI ecosystem.” The valuation itself marks a roughly 7.6 times jump from Sarvam’s last pricing, about $196 million, less than a year earlier. Sarvam says its platform already handles more than 2 million conversational interactions and 10 million API calls a day, across banking, insurance, defense and government deployments.

Why Does Sovereign AI Suddenly Feel So Urgent?

India’s push to own a piece of Sarvam follows weeks after Washington restricted foreign access to Anthropic’s most advanced models, a move that renewed fears in New Delhi about depending on foreign AI labs. The IndiaAI Mission, a national program built around domestic compute and indigenous model development, exists specifically to build alternatives to that dependence.

On June 12, the US Commerce Department ordered Anthropic to cut off foreign nationals’ access to its Fable 5 and Mythos 5 models, citing national security concerns. Washington eased the restriction within weeks, though Mythos 5 has stayed largely limited to US organizations. Sarvam’s funding round closed just three days after that order, and Indian commentators wasted no time linking the two events.

The IndiaAI Mission itself traces to March 2024, when the Cabinet approved a ₹10,371.92 crore national program (about $1.25 billion) built around compute infrastructure, indigenous model development and startup financing. Sarvam was one of twelve organizations MeitY (the Ministry of Electronics and Information Technology) selected in April 2025 to build foundation models tailored to Indian languages, and its GPU allocation was the largest of the group. Indian AI startups raised $1.48 billion in the first quarter of 2026 alone, about 38% of all domestic startup funding that quarter, per data cited by Tech Times, a sign of how much capital is already chasing the sector.

Washington’s Version Looks Nothing Alike

OpenAI pitched the US government something structurally opposite: a voluntary donation instead of a compute linked conversion. Chief executive Sam Altman has raised the idea with President Trump, Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent periodically since early 2025. The version reported this month would hand Washington a 5% stake worth about $42.6 billion, based on OpenAI’s $852 billion valuation from its March funding round.

Altman wants other large AI labs, including Anthropic, Google and Meta, to contribute similar stakes into a vehicle modeled on the Alaska Permanent Fund, which pays state residents an annual dividend from oil wealth. Trump has called the concept “a beautiful thing” that would make Americans “partners in this revolution.” Bernie Sanders, the independent senator from Vermont, wants to go much further: a one time 50% stock tax on major AI companies, funneled into a public fund his office estimates could eventually reach $7 trillion.

Anthropic has denied discussing a similar arrangement with the administration, and the White House has not confirmed talks either. Some conservatives are uneasy regardless. David Sacks, who previously served as the administration’s AI advisor, said he could “almost support the Sanders proposal as a stupidity tax,” while warning that nationalizing AI would speed up a “corporate government fusion” already underway.

None of this is happening in a vacuum. Washington has already taken equity in industries once thought untouchable by federal ownership:

• Intel – an $8.9 billion investment last August secured the government a 10% stake in the chipmaker
• Nine quantum computing firms – minority stakes taken under the CHIPS Act framework
• MP Materials and USA Rare Earth – equity positions in rare earth miners tied to supply chain security
• IBM – an additional government equity position taken as part of the same critical technology push

Trump has since said he regrets not asking Intel for a bigger cut.

Two Deals Built from Opposite Directions

Set side by side, the Indian and American proposals share a premise and little else.

The scale gap tells its own story. One analysis found OpenAI’s proposed stake alone could support roughly $2 billion a year in payouts under an Alaska style formula. Sarvam’s entire 1% to 2% stake, by contrast, is worth less than a rounding error on that number, even as both governments describe the logic in nearly identical terms.

The Other Eleven Startups Are Watching Closely

Sarvam was one of twelve organizations MeitY selected for compute support under the IndiaAI Mission, but it is the only one so far to have raised a round anywhere near this size. MeitY has not said whether the same CCD to equity structure will apply once the other eleven convert their subsidies.

Some IndiaAI Mission participants pushed back earlier this year on the CCD approach altogether, arguing a straightforward grant would have supported indigenous AI without diluting smaller startups’ cap tables. Sarvam’s round proceeded regardless, and founders elsewhere in Indian AI have raised only mild concern so far about the precedent a government held stake sets for public sector dilution across the cohort.

The bigger contradiction sits in the spending. The mission’s approved budget runs past ₹10,300 crore over five years, yet less than 4% of it had actually been disbursed through the mission’s first two years, according to figures the government shared in Parliament. A single startup is about to hand New Delhi an equity stake before the mission has spent most of the money that produced it.

Where Experts Disagree

Not everyone reads the same facts the same way.

• Kumar Rajagopalan, India country head at Dexian: calls the Sarvam stake potentially “a paradigm shift in how India supports the creation and commercialisation of AI technologies,” though he argues equity should stay reserved for projects of genuine strategic importance while the government’s main job remains building shared infrastructure.
• Jennifer Huddleston, Cato Institute: sees a pattern worth watching, saying “we’re continuing to see the government pick preferred companies and engage in this kind of investment,” which she argues intrudes on free market principles.
• David Sacks, former White House AI advisor: opposes the far larger Sanders plan but concedes it “resonates with people, even conservatives,” blaming AI executives for hyping the technology’s risks without explaining its benefits.

Forrester analyst Indranil Bandyopadhyay adds a wrinkle specific to OpenAI’s pitch: taking government money could reassure domestic regulators while unsettling everyone else. “Expect other jurisdictions to demand analogous arrangements as a condition of market access,” he said.

Sarvam’s Second Close Is the Next Deadline

Sarvam still needs to close the remaining $66 million of its $300 million round before the CCDs formally convert and New Delhi’s name lands on the cap table. That close is the one date on this story’s calendar that actually arrives on schedule.

On the US side, nothing is close to final. Talks between Altman and the administration remain, in the words of people briefed on them, conceptual. Any formal arrangement would likely need congressional approval, and Anthropic, Google and Meta have all stayed publicly noncommittal about following OpenAI’s lead.

A government holding equity in AI companies it also regulates has to decide whether it is acting as a shareholder or a referee. India is answering that question with GPUs. Washington has not answered it yet.

Frequently Asked Questions

What Is a Compulsorily Convertible Debenture, and Why Did India Use One for Sarvam?

A compulsorily convertible debenture, or CCD, is a debt instrument that must convert into equity shares on a set trigger rather than being repaid in cash. India used one to formalize its GPU subsidy to Sarvam because CCDs let the government fix a claim on future equity upfront, instead of negotiating a price once the startup’s valuation moved. That structure is why the subsidy sat on the books for months before converting once Sarvam’s Series B priced the company at $1.5 billion.

Will India’s Government Get Board Seats or Voting Power at Sarvam?

Nothing reported so far suggests it will. The Sarvam arrangement is described purely as a passive equity conversion tied to compute support, with no board representation mentioned. That contrasts with Bernie Sanders’ proposal in the US, which explicitly calls for the government to receive board seats and voting power alongside its proposed 50% stake in major AI companies.

Has OpenAI’s 5% Government Stake Offer Been Finalized?

No. People familiar with the discussions describe them as conceptual and early stage, and any formal deal would likely require an act of Congress. Anthropic has said it is not having similar conversations with the administration, and neither the White House nor Google nor Meta has confirmed joining OpenAI’s proposed structure.

What Happens to the Other Companies in India’s IndiaAI Mission Cohort?

MeitY has not clarified whether the eleven other organizations chosen alongside Sarvam will see their compute subsidies convert into government equity the same way. The mission’s broader execution has lagged regardless: just ₹21.79 crore was released against a revised estimate of ₹173 crore in 2024-25, and ₹379.15 crore against a revised ₹800 crore in 2025-26, with nothing yet released for 2026-27.