What Is the Real Business Model Behind AI? Ft. Vivek Raghan, Co-Founder Sarvam AI

AI is getting better. AI models are getting more capable. And yet, in many cases, the cost of using AI keeps falling. So… who is actually paying for all of this? In this conversation, Roshan Cariappa sits down with Vivek Raghavan, Co-founder of Sarvam AI, to unpack one of the biggest questions around the AI boom: what is the real business model behind AI? We talk about why companies can spend billions building AI and still offer powerful models to users at little or no upfront cost. What exactly are we giving up when we use “free” AI? And if India is among the world's biggest users of AI, are we simply exporting our data and importing intelligence? The conversation then goes much deeper. Vivek explains how large language models actually work, why training frontier AI is so expensive, and why rapidly improving GPUs and smaller, specialised models could make advanced AI dramatically cheaper to build. We also discuss India's AI strategy, sovereign AI, China’s approach to technology, the growing geopolitical importance of AI, and whether India can build foundational AI capabilities of its own. And perhaps most importantly: has India actually missed the AI bus—or is the economics of AI changing fast enough for India to catch up? ⏱️ CHAPTERS (00:00) – The AI question nobody is asking (00:19) – Who actually controls the AI world? (00:58) – Meet Vivek Raghavan & Sarvam AI (01:28) – How does an AI model actually work? (03:32) – What are the “parameters” inside an AI model? (04:58) – How AI actually generates an answer (05:44) – Does AI really “learn” when we use it? (07:19) – Why should India build its own AI? (08:37) – Where should Indian data actually live? (09:26) – If AI is free, what are we really paying for? (10:34) – India: exporting data, importing intelligence (11:52) – What did China do differently? (14:34) – Should India create space for Indian AI companies? (15:10) – AI has become a geopolitical game (15:45) – Will AI create a new global power hierarchy? (16:36) – How do you actually build sovereign AI? (18:00) – Why building AI is getting cheaper (19:30) – Why India may NOT be too late to AI (20:16) – Do we really need the biggest AI models? (21:48) – Why sovereign AI matters in the long run (23:13) – Can smaller AI models beat frontier models? (23:35) – India’s unique advantage in AI (24:34) – What exactly is Sarvam AI building? (25:21) – Why voice could be the future of Indian AI (26:09) – “We are at the base of the mountain” (26:24) – The road ahead for India’s AI ambitions 🎙️ ABOUT VIVEK RAGHAVAN Vivek Raghavan is the Co-founder of Sarvam AI, an Indian company building a full-stack sovereign AI platform focused on India's languages, context and everyday needs. Before Sarvam, Vivek was involved in building India's digital public infrastructure, including work connected with Aadhaar and UIDAI. He brings that experience in building technology at population scale into the AI ecosystem. Sarvam is now building foundational models, AI infrastructure and applications designed for India, with a particular focus on multilingual and voice-first AI. 🇮🇳 ABOUT BHARATVAARTA Bharatvaarta is a long-form podcast focused on India's politics, policy, economy, technology and culture. We bring together founders, policymakers, technologists, academics, writers and thinkers to have honest, in-depth conversations about what is happening around us — and what it means for India's future. Subscribe to Bharatvaarta for more conversations that go beyond the headlines. 🌐 Website: https://www.bharatvaarta.in 🐦 X: https://x.com/bharatvaarta 📸 Instagram:   / bharatvaarta