Anthropic’s Fable 5 takedown triggers India Inc push for AI self-reliance

The US government’s directive to suspend access to Anthropic’s Fable 5 and Mythos 5 models has triggered a strong push for artificial intelligence self-reliance within India Inc, with technology leaders, investors and developers calling it a turning point for global access to critical AI infrastructure.

Sridhar Vembu, founder of Zoho Corp, said the development underscored the centrality of technology to national power. “Technology is the ultimate weapon. National sovereignty, national security, all of it is now about technology,” he said, adding that “globalisation is dead and Bharat must find her own way ahead.”



Vembu called for India to prioritise smaller, open-source models and deepen domestic research and development, noting constraints around access to high-end GPUs and capital required for frontier models.

Adding to calls for stronger policy action, Mohandas Pai, chairman at Aarin Capital, urged the government to launch a large-scale national AI push suggesting an annual 50,000 crore fund for deep tech and AI.


Siddarth Pai, founding partner at venture capital firm 3one4 Capital, said, “we need to invest in semiconductor design and work on building open source models.”

Hemant Mohapatra, partner at Lightspeed Venture Partners said: “The ‘sovereign AI is real’ moment is here. Nation-states will soon start needing citizenship and/or security clearances to work on the next SOTA models the way they do for defense, space, nuclear tech,” he said, warning that “talent wars here will be crazy.”


Paytm founder and CEO Vijay Shekhar Sharma said the move was “understandable,” but raised questions on alternatives, asking, “Do you think open source models will reach this level of sophistication?”


Sumit Gupta, cofounder of crypto exchange CoinDCX, described the development as a national concern. “This should disturb every Indian founder, investor & policymaker,” he wrote, adding that “frontier AI is the new super power” and warning that reliance on foreign AI systems could lead to long-term economic dependence. He argued that “if India doesn't build foundational models, we pay rent on the intelligence layer of our own economy for decades,” calling for greater capital deployment into domestic AI capabilities.


Nischal Shetty, cofounder of WazirX, said the move signals a shift towards concentrated control of AI capabilities. “A few large institutions control work output across the world due to AI,” he wrote, adding that “open models and more importantly localised on-device AI should win."

Harsh Gupta Madhusudan, fund manager at Ionic Wealth, called for restrictions, stating that “import substitution… is always the first step towards export promotion,” and pointed to China’s approach of restricting foreign technologies while building domestic capabilities.

“We need our own frontier models… the killing of Claude Fable for foreigners by Anthropic should show us what is in store,” he wrote.


Investor Sandeep Mall said the episode exposed structural dependence. “Tools we depend on can be switched off overnight, by a government we have no vote in,” he said, calling for India to invest in building foundational AI models rather than services built on external platforms.


Malay Krishna, director of product management at Vyapar, said the move signals a structural shift in how advanced AI is governed and accessed.

“The most powerful AI is now being treated like advanced chips. A controlled export,” he wrote, adding that “if a tool can be switched off from a foreign capital you do not vote in, you cannot put anything critical on top of it.” He warned of a “two-tier AI world,” where “US persons get the top tier… the rest of us get the model one notch below,” and urged developers to “treat model access like a supply chain with risk.”


Others suggested that sovereign AI capabilities must be backed by substantially higher capital and incentives to attract top talent.

Global perspectives

Mukund Jha, founder and CEO of Emergent, questioned whether such developments signal tighter pre-approval regimes for AI systems.


Entrepreneur and investor Alex Finn described the move as a broader warning for users of centralised AI systems. “This is your wakeup call… no company or government will ever be able to take away your local models,” he said, arguing for increased adoption of locally run AI systems.


AI commentator Matthew Berman attributed the situation partly to Anthropic’s own positioning, writing it was “self-inflicted” and “would have never happened if anthropic didn't make such a big deal about mythos being dangerous.”


Developer Theo Browne, known online as Theo, took a more personal tone, posting, “Fable, my beloved, I will miss you so… Some things are just too good to be true. So good that the government interferes.”


Matt Shumer, CEO of AI startup OthersideAI, highlighted the productivity gap between models, stating, “What can be done in 100 hours with Opus can be done in 1 with Fable,” and said work could stall until access is restored.

Semiconductor analyst Dylan Patel suggested the move could influence competitive dynamics, writing that US firms may moderate future model releases to avoid export controls.