In an interaction with Kshitij Anand of ETMarkets, Amit Goel, Co-Founder and Chief Global Strategist at PACE 360, highlighted how the limited availability of pure-play AI opportunities in India, compared to the depth and diversity in the US, is driving this trend.
He noted that with access routes such as overseas investing frameworks and evolving platforms like GIFT City, Indian ultra-HNIs and family offices are increasingly allocating capital to global markets, particularly the US, where sectors like AI, cloud, and digital infrastructure offer a far richer investment playbook.
This shift, he added, reflects both a search for better returns and the need for diversification in an increasingly interconnected global investment landscape.
Edited excerpts –
Kshitij Anand: Well, you are uniquely positioned with exposure to both India and the US. What are the most prominent conversations you are currently having with family offices and investors across these markets?
Amit Goel: So, there is absolutely no doubt about it—what you just said is absolutely correct—that a lot of family offices that have been investing primarily in India are now increasingly enthused and fascinated with the whole AI story that has been unfolding over the last three years. In particular, over the past two years, we have seen that while the Indian market has been rather lacklustre and does not offer too many avenues to bet on the AI story, investors in other markets like the US, and even countries such as South Korea and Taiwan, are literally spoiled for choice when it comes to AI plays.
So, this is a conversation we’re having with every family office in our network: how they can leverage the unfolding AI story and invest part of their corpus in opportunities that are still fresh yet have a long runway ahead. AI fits the bill for many of them right now.
Kshitij Anand: Well, in fact, the AI boom in the US is clearly a dominant theme. So, how can Indian investors meaningfully participate in this opportunity across both public and private markets?
Amit Goel: Fortunately, for most ultra-HNIs who either have some of their money overseas or are in a position to remit funds through LRS, or if they are large enough, there are certain options permitted by the RBI where they can remit more than the LRS limits. So, many of them are looking to invest overseas.
Yes, they can invest in both public and private markets. In public markets, of course, there are the usual names like Nvidia, for example, and many hyperscalers that are truly AI-driven stories. One could argue in favour of one over the other, but whether it is Nvidia, Alphabet, Microsoft, Meta, Oracle, or even companies like CoreWeave, there are many options in the US markets when it comes to public equities.
In the private markets as well, there are opportunities such as OpenAI, Anthropic, and several others where investors can place bets. While investing in public markets is relatively straightforward and well understood, access to private markets depends on the size of the corpus. If the corpus is large enough, investors can directly participate in individual opportunities. Otherwise, there are funds in the US that piggyback on some of these large unlisted AI or related companies. Investors can participate through such funds, which may be structured as mutual funds or even ETFs that eventually invest in these unlisted companies.
I think there are many options available for investors to choose from, and that is exactly what many family offices are currently doing.
Kshitij Anand: In fact, AI has been the buzzword across markets—not just in India, but globally—for the past 12 to 18 months. However, I am sure many investors who hear this story would want to understand how real it is. So, on the ground, how real is this AI-driven transformation, and which sectors are seeing the most disruption or capital inflows?
Amit Goel: That is a great question. The situation is changing very rapidly at the ground level. AI is very real, and it is affecting almost every industry, sector, theme, and company. It is influencing how customers choose to buy products, impacting operational efficiencies, and even reshaping workforce structures within companies.
There is also a lot of discussion around whether AI will eventually replace jobs—particularly in middle management, not necessarily at the top or entry levels—and how many new jobs it might create in return. There is no doubt in our minds that this transformation is real and will continue to evolve over a long period.
If we look back 10–15 years from now, the period between 2022 and 2023 may well be seen as a pivotal moment in global economic history—when AI, which had existed for some time, gained mass adoption and began significantly reshaping the world and everyday life.
That said, there is also a school of thought—one we are increasingly considering—that while this long-term transformation is real, many companies may currently be overinvesting in the theme. If adoption progresses more slowly than expected, even temporarily, that phase of reduced momentum could impact the fortunes of companies that are aggressively investing today.
So, there are several important and relevant questions around this theme. What we are trying to do is interpret the available knowledge and insights through a macro, top-down lens, and then place our bets across sectors and companies accordingly.
Kshitij Anand: In fact, before geopolitical concerns and trade wars took center stage, the AI theme was the dominant force in markets, particularly impacting the IT sector. We have seen disruptions in IT before, but do you think 2026 is structurally different from previous tech cycles? Could we see a kind of rebirth in IT?
Amit Goel: You are absolutely right—the rebirth is already underway. And this is not limited to India; it is happening globally, as markets try to assess which business models are more at risk.
For instance, software companies that are heavily reliant on coding and programming, and are more service-oriented rather than product-driven—helping clients transition to new systems and business models—may be more vulnerable. Over time, much of this work could be done with significantly less manpower using advanced AI tools that are already being developed.
In that sense, AI is truly disruptive. Many traditional software players could face significant challenges, as their revenue models may come under pressure. However, this remains an ongoing debate and is far from settled.
Even in the context of Indian IT, there are differing expert views. Some believe these companies could see a substantial erosion in their revenue base over the next five years. Others argue that increased productivity will allow them to deliver more with fewer people, ensuring their relevance for a long time.
To understand which direction things may take, it is helpful to observe market behavior, which reflects the collective wisdom of global investors. Currently, many software stocks have corrected sharply—some by 20–30%, and others by as much as 50–70% in both India and global markets.
This suggests that the view anticipating pressure on revenue models over the next five to seven years is, at present, gaining more acceptance and endorsement from the markets than the alternative perspective.
Kshitij Anand: And let us go beyond borders. We are seeing more Indian ultra-HNIs explore global investing. So, how are routes like LRS and GIFT City changing access to the US market?
Amit Goel: LRS is, of course, very simple to understand, and since it has been around for almost 17–18 years now, most wealthy Indian families are familiar with it. It is quite straightforward—you can open an account with an international broker, transfer money from your rupee-denominated account to that account, and start investing in stocks globally. Whether it is the US, Korea, Taiwan, China, or any other market where there is significant action, especially in AI, you can invest directly or through relevant ETFs.
Apart from LRS, GIFT City has opened up additional avenues. Indian operating companies and family offices can set up entities in GIFT City and remit amounts exceeding the $250,000 per family member limit under LRS. Through this route, they can establish family offices, deploy larger pools of capital, and invest globally.
That said, while these routes exist, they are not as simple as they may sound. Approvals can take time, and there are multiple RBI permissions, regulations, and compliance requirements involved. Nevertheless, these pathways are available, particularly for large and wealthy Indian families.
Kshitij Anand: Let us now talk about investors in the US who are looking at India as an attractive investment destination. The NRI and diaspora capital story seems to be gaining momentum. How significant is this pool of capital, and how is it influencing flows between India and the US?
Amit Goel: Absolutely, this trend is becoming increasingly significant. One of the key factors has been that since around August–September 2024, Indian markets have underperformed compared to most developed and emerging markets. Earlier, investors were quite satisfied with strong returns in India and had little motivation to allocate capital overseas.
However, that is now changing. Investors are becoming more receptive to the idea that a portion of their wealth should be deployed globally. This not only helps hedge against INR depreciation but also provides access to opportunities that are not well represented in India—particularly in areas like AI, automation, and machine learning, where India currently has limited listed and unlisted exposure.
This shift is clearly influencing capital flows. While it is not yet large enough to significantly impact India’s foreign exchange reserves, it is meaningful. Billions of dollars are moving in line with this trend.
Many NRIs, who earlier channelled a large portion of their capital into Indian markets, are now retaining a share for global investments. This trend is visible across investors and family offices in regions such as the Middle East, Singapore, the UK, Europe, and the US. At the same time, resident Indian investors are also increasingly participating through LRS and other RBI-permitted routes.
While it is difficult to quantify precisely, my estimate is that flows in the range of $8–10 billion are being influenced—either through capital moving out of India or through capital that would have come into India being deployed elsewhere. These are meaningful flows, though not large enough at this stage to materially impact India’s macroeconomic or foreign exchange reserve position.
Kshitij Anand: How do you currently read the US and global macro environment from an Indian investor’s lens? And where do you see the biggest risks and opportunities over the next, let us say, 12 to 24 months?
Amit Goel: Thanks for asking that. As a macro, top-down investor and fund manager, this is what consumes our attention day in and day out. It is, of course, a very volatile macro environment, and it has been so for quite some time—particularly since Donald Trump became US President. Things are changing almost daily, making short-term navigation quite challenging. However, I believe longer-term trends tend to hold despite short-term volatility.
In my view, the current correction, which was triggered by Middle East tensions and the Iran conflict, presents an opportunity for investors. It allows them to access good-quality stocks and compelling stories at relatively attractive valuations. Eventually, such conflicts tend to get resolved one way or another, and one can expect a return to normalcy over the next few weeks or months. Investors who deploy capital during such periods could potentially benefit.
That is broadly our approach as well. We are gradually increasing our equity exposure after having maintained very low participation levels earlier. In fact, we were at single-digit equity exposure across most of our products, which we have now raised meaningfully in anticipation of gains once the conflict stabilises.
In the near term, we see tailwinds emerging from potential conflict resolution as well as from the continued momentum in AI-driven themes. However, over the longer term—say, the next two to three years—we do have concerns.
Historically, with every major technological evolution over the past 300–400 years, the extent of change has often been underestimated, while the speed of change has been overestimated at the peak. This has been true for railroads, electricity, the telegraph, aviation, automobiles, and the internet. I believe the same pattern will play out with AI. While AI will undoubtedly transform many aspects of the economy over the next 10–15 years, expectations around the pace of change in the near term may be overly optimistic.
As a result, investors who are currently overinvested in equities may get an opportunity to exit profitably over the next few months. However, beyond that, tailwinds could be overshadowed by emerging headwinds. We appear to be in a late-stage macroeconomic cycle, with elevated risks stemming from high debt levels, excessive investments in AI, and increased leverage by companies to fund such investments.
These factors add to systemic vulnerabilities. Therefore, my view is that investors should consider booking profits or reducing equity exposure over the next few months, and then reassess the environment. Over a two- to three-year horizon, the probability of a US recession and a bear market in equities is rising, which would likely have a global impact, including on Indian markets.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)