India attracts AI billions, but HSBC's top investment picks are China, Japan and Korea; know why

As global tech giants channel substantial investments into India's artificial intelligence (AI) sector, cloud computing, and digital infrastructure, HSBC Private Bank's latest investment insights indicate that investors looking to capitalize on Asia's AI growth may find more promising prospects in other regions. In its mid-year report titled "Top Trends and High Conviction Themes: Mid-Year 2026," HSBC recognizes Asia as a primary beneficiary of the upcoming wave of AI-driven investments. However, while India has undeniably become a focal point for foreign capital, the bank's investment recommendations are heavily skewed towards China, Japan, South Korea, and Singapore, with India's role mentioned only in relation to broader energy and sustainability discussions. Despite geopolitical challenges and trade tensions, India's allure for multinational corporations remains strong. Notable investments have been announced, such as Google’s ambitious $15 billion five-year plan aimed at enhancing AI infrastructure in India, which encompasses subsea connectivity, cloud capabilities, data centers, and AI training initiatives. Additionally, AirTrunk from Australia has unveiled plans to invest $30 billion to establish 5 GW of data center capacity in India by 2030. The Canada Pension Plan Investment Board has also partnered with CtrlS Datacenters, committing up to ₹7,000 crore to bolster hyperscale digital infrastructure. The investment momentum continued to build in June when Amazon’s CEO Andy Jassy pledged to increase the company’s investment in India to $48 billion by 2030, primarily focusing on AI and cloud infrastructure. Industrial firms are not left behind; ABB announced a $75 million expansion of its manufacturing and research facilities, while Saint-Gobain committed an additional €1 billion over the next five years. Despite the optimism surrounding India’s digital economy, HSBC’s investment strategy is primarily concentrated on opportunities within listed markets rather than those attracting foreign direct investment. The bank regards China as possessing the most robust AI and advanced manufacturing potential, citing opportunities in semiconductors, AI technologies, robotics, and biotechnology, bolstered by governmental support and significant capital investments from local tech firms. Japan is highlighted for its corporate governance reforms and increased shareholder returns through dividends and buybacks, while South Korea stands out due to its advancements in AI technology and semiconductors. Singapore similarly benefits from reforms aimed at enhancing shareholder value. HSBC acknowledges the burgeoning Data Centre Boom in Asia, projecting that data center capacity in the Asia-Pacific region will more than double by 2030, comprising about 40% of the global capacity. Key beneficiaries of this growth include semiconductor manufacturers and power infrastructure companies. However, the bank points to Australia, Japan, and Southeast Asia as the primary winners while omitting India from this critical investment narrative. This divergence in perspectives illustrates two distinct approaches to Asia’s AI landscape. While global corporations are investing significantly in India to establish the necessary infrastructure for future AI integration, HSBC is focusing on where existing listed companies can deliver superior returns. This dichotomy clarifies why India continues to attract massive AI investments, even as HSBC’s investment strategies remain concentrated on other Asian markets.