AI boom's high salaries stifling Indian chip-design startups: TDK Ventures

Soaring AI-driven salaries and stock options are discouraging Indian chip-design talent from taking the risk of building deep-tech startups, TDK Ventures says

High and escalating salaries offered by Global Capability Centres since the artificial intelligence (AI) boom have become a “golden handcuff” and a key impediment for tech talent to launch their own startups in the chip-design space in India, according to Ravi Jain, investment director of San Jose-headquartered private equity (PE) fund TDK Ventures.

 

TDK Ventures is a wholly owned subsidiary of TDK Corporation, a Japanese multinational electronics company specialising in components, sensors, and data storage media. It is already in India with a manufacturing plant, making lithium-ion cells for Apple iPhones.

 

Speaking to Business Standard, Jain said: “I've tried meeting every semiconductor chip-design company out there, but there just aren't many. The real issue is that global captives are hand-delivering golden handcuffs to young techies right at the start of their careers. Thanks to the AI boom, their salaries and stock options have escalated so much that they have almost no financial motivation to launch a startup.”

 

 

Jain highlighted that deep-tech startups — especially those in chip-design — face several critical challenges: a low tolerance for risk, the strategic choice between solving global versus minor problems, the danger of designing in a vacuum without an established customer, and the absence of a domestic supporting ecosystem, such as Taiwan's robust supply chain.

 

In India, TDK has taken stakes in electric two-wheeler company Ultraviolette and fast-charging firm Exponent Energy, among others.

 

Jain said that the company operates in two broad buckets — one is related to computing, and the other to energy transition, which includes backing mobility companies.