As AI makes it easier to build new technology, the harder and more valuable task may be figuring out which problems are actually worth solving.
A few days ago in San Francisco, I watched early-stage founders compress years of work into three-minute pitches. I was judging startups at STEP San Francisco, and Artificial intelligence was, unsurprisingly, everywhere. But after several days of conversations with founders and investors, the question I carried home to London wasn’t really about AI. It was about recognition.
Investors describe pattern recognition – experience teaching them what a promising founder, market, or company looks like. There is an obvious problem with this recognition. The better we get at spotting patterns from the past, the easier it becomes to miss something that doesn’t yet resemble them. Call it pattern blindness. It may be becoming one of the more important problems in technology.
When building becomes abundant
For most of the software era, the ability to rebuild was itself scarce. Turning an idea into a product took engineers, time, infrastructure, and capital. But AI is starting to erode those barriers. Small teams can prototype faster, development is getting cheaper, and capabilities that once needed serious technical resources are now a few tools away.
That’s good news for entrepreneurs, but it changes what competitive advantage looks like. When more people get to access the technological building abilities, knowing what to build matters more. And when thousands of founders have access to similar underlying technology, the edge may belong to whoever understands something about the world that everyone else overlooked.
That idea has relevance for India. For years, the country’s technology conversation has carried a slightly defensive question: can Bengaluru become another Silicon Valley? Maybe it’s time to stop asking.
Problems are information
India has something Silicon Valley can’t manufacture: proximity to a vast number of difficult problems at extraordinary scale – electricity systems under pressure, extreme heat, congested cities, industrial inefficiency, agricultural productivity, water, logistics, healthcare access, affordable cooling.
These are usually framed as constraints on development. But they’re also sources of information. Someone living inside an unreliable system knows exactly where it fails.
An engineer who spent years in a factory sees inefficiencies an outsider wouldn’t. A founder working alongside farmers understands where elegant technology becomes economically useless. A power-system operator may spot a bottleneck long before it shows up in an investment thesis.
This kind of knowledge is rarely treated as an asset. Perhaps it should be – proximity to a problem can itself be a form of intelligence. The innovation economy is very good at attaching enormous valuations to knowledge once it’s been converted into IP, software or a company. But it rarely recognises the tacit knowledge that comes before any of that. That’s where India’s opportunity gets interesting.
The future is becoming physical again
Technology’s centre of gravity is also shifting. AI may look weightless, but its consequences aren’t. Computing needs data centres, data centres need electricity, cooling, land and transmission, electrification needs grids and storage, advanced manufacturing needs materials, machinery and energy.
India’s electricity demand is forecast to grow by an average of 6.4 per cent a year between 2026 and 2030, with the International Energy Agency expecting the country to add more than 570 terawatt-hours of annual consumption in that window. Cooling alone could account for over a fifth of that growth.
These numbers usually get presented as an infrastructure challenge. However, an entrepreneur might read them differently.
570 terawatt-hours of additional demand requires an enormous market for generation, storage, grid intelligence, efficiency, cooling technology, industrial optimisation and demand management.
A constraint of sufficient scale eventually becomes a market, and one shared by enough countries can become an export market. India isn’t alone in facing fast-growing cities, rising cooling demand, and the need to industrialise and decarbonise at once. So, if Indian entrepreneurs learn to solve the problems cheaply and effectively, those solutions could become products for the rest of the world.
That’s a far more ambitious idea than becoming a cheaper Silicon Valley.
India must stop importing the definition of innovation
However, the argument has an uncomfortable side. Difficult problems do not automatically produce important companies. An ecosystem also has to recognise promising solutions before their value becomes obvious.
Capital often goes towards ideas that investors already understand. A business model that has worked in the US may seem less risky than a new one. A founder from a well-known university may appear easier to evaluate. And a popular AI startup may attract more attention than an industrial technology that is less familiar and could take years to develop.
This creates a problem for India. The country could possess information about future problems, while continuing to allocate capital based on past investment patterns.
Government policy is beginning to acknowledge part of this mismatch. The ₹1 lakh crore Research, Development and Innovation scheme is meant to back high-risk, high-impact technologies, while the newer ₹10,000 crore Startup India Fund of Funds 2.0 specifically lists deep technology and innovative manufacturing among its priorities.
That funding architecture matters because much of the technology that India needs won’t behave like a typical software business. A grid technology needs pilots; a new industrial process needs demonstration facilities; advanced materials can take years to develop.
Energy technologies may eventually need infrastructure finance rather than another venture-capital round. India therefore needs more than additional startup capital. It needs investors, corporations and institutions capable of recognising different forms of technological value.
The investor’s question
Investors routinely ask founders a necessary question: can this scale? But perhaps another should precede it: What does this founder understand that the rest of us have not recognised yet?
The answer might be a scientific breakthrough. But it could equally be a mundane observation about why an industrial process wastes energy, why a supply chain repeatedly breaks, or why a technology designed for wealthy markets fails when deployed elsewhere.
The world’s most valuable companies aren’t always built by inventing new needs; often they come from seeing an existing need differently. AI makes that ability more valuable, not less.
If machines keep getting better at writing code, analysing information and producing answers, one of the lasting human advantages may lie further upstream: choosing which questions deserve attention. AI can process what has already been recorded. Most of the world’s useful knowledge never has been. It lives in experience.
What India should borrow from Silicon Valley
I returned from San Francisco admiring something the Valley still does exceptionally well. Not technology, but confidence. It has built an ecosystem where a small group of people can encounter an unusual idea and quickly imagine it becoming a very large company.
India should borrow that confidence. It doesn’t need to borrow Silicon Valley’s problems – it already has better ones. The country’s next technology advantage may depend less on producing another generation of familiar unicorns, and more on building institutions that can spot unfamiliar value: entrepreneurs outside the usual networks, knowledge emerging from difficult environments, and technologies whose importance hasn’t yet found a fashionable category.
India’s problems aren’t a competitive advantage. But the ability to recognise the intelligence hidden inside them could be. As technology gets easier to build, that distinction may matter more than we think.
Gayatri Panda is a London-based investor specialising in climate tech and emerging technologies. She is Co-Founder of IBU Capital and a UN Climate Technology Mentor, with a focus on investment and innovation across the global transition to a more sustainable economy.
Edited by Maryam Hassan