India Markets Jump After Nvidia Ceos Bold Ai Software Call The Core Report

TITLE: India Markets Jump After Nvidia CEO’s Bold AI Software Call | Govindraj Ethiraj | The Core Report CHANNEL: The Core DATE: 2026-06-03

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Good morning. It’s Wednesday the 3rd of June and this is Govindra Jati Raj broadcasting and streaming weekdays from Mumbai, India’s financial capital. Our top stories and themes. Why Nvidia CEO statement set Indian markets raising decoding the AI investment frenzy. Assessing the inflation impact of rising fuel prices and why jewelity stores are expanding across India and what that means for retail.

This is a call report with Govindraj Adira.

South Korea’s equity markets have now overtaken India as the world’s sixth largest. The total market capitalization of Korea listed companies has gone up 86% this year to $5 trillion while India has declined to $4.8 trillion according to data from Bloomberg. Samsung Electronics and SKH Highix, the latest members of the $1 trillion valuation club have led Korea’s equity surge and powered it. Together with Taiwan, the two Asian chipmaking hubs are rewriting global equity rankings in a way that captures investor fascination over their outsized influence in the AI economy, even as it stirs concern about the risks of an overheated market.

According to that Bloomberg report, three further developments this week underline how the AI industry is entering another phase defined this time by capital intensity, platform expansion, and of course, investor frenzy. First, Alphabet is seeking to raise $80 billion to fund AI infrastructure, data centers, and compute capacity. Alphabet is Google. Second anthropic, the maker of cloud has confidentially filed for an initial public offer or IPO. A signal that AI labs are now beginning to transition from venture funded startups to public market companies. Third, as we mentioned yesterday as well, Nvidia is attempting to extend its dominance beyond data centers into personal computers with a new generation of AI focused PC chips. Betting that AI workloads will increasingly run on devices rather than solely in the cloud. All of this obviously means more capital, dedicated hardware and public market funding to sustain growth. So what does it all add up to? There are of course several theories which of course change every week too. But here is what IBM CEO Arvind Krishna told Nikolai Tangen, CEO of not just bank investment management on a podcast a few weeks ago to listen carefully.

Which part of AI is a bubble? I think that some of the infrastructure buildout is probably a bit ahead of what the world can tolerate for the next few years. The way I would phrase it as because I’ve been accused sometimes by saying that it’s not a bubble but I believe that which is kind of why I pose the question a bit carefully here. Some will disappoint, many will thrive but not all will thrive is the way I would phrase it. So when you say the infrastructure billard is a bit ahead what does that mean? Look by the math that I have done about a gawatt of power you can debate but cost you 60 to 80 billion worth of semiconductors to go populate it. So if you look at people have committed over a 100 gawatt of AI data center buildout that points to 6 to 8 trillion worth of a buildout. If you say that that’s got a five to sevenyear payback, you are going to need an extra 1 to 2 trillion a year of revenue because inside that 1 to 2 even if it’s high margin that high margin would be 20 to 30%. So that much incremental revenue I don’t believe is there and so that’s why I think it’s a beta head. I also believe on a second one that many of the largest models are going to be a commodity. Commodities can have a lot of value but there is low switching cost usually between commodities. If there is low switching cost that means you can have a margin but it’s not going to be a margin with a massive moat around it. So those two make me believe that perhaps there aren’t going to be a half dozen to a dozen companies who can build the largest models and survive. maybe two or three and that then tells you the second side of it is how much can be the total capital expense that goes into the data centers. If you had said it was half as much as today I would have said that completely makes sense. I mean that aligns but when it’s double of that then maybe some of those are not going to be able to get a great return.

So who are going to be the losers?

That is very hard to predict who’s going to be the winners generally from AI. Look, some of them that already have a very large consumer business, that means you have a natural distribution advantage on the consumer side.

On the enterprise side, I think it’s wide open to decide who’s going to win. I don’t think that that is predetermined. On the consumer side, I think history has shown us if you have distribution and if the distribution is aligned to AI, there’s a pretty good chance you will be one of the winners.

Of course, IBM’s CEO is being careful about what he calls a bubble and not, but you can clearly see where the euphoria lies. But there is some good news for India coming from all of this. Thanks once again to Nvidia CEO Jensen Wang. This is actually an incredible time to be a software company. Bloomberg reported Huang saying as he once again dismissed fears that artificial intelligence will decimate the software industry. He echoed a view long held by some of the sector’s few but committed investors that AI will ultimately expand rather than shrink the market for tech services. A lot of people have said, Jensen, agentic AI is coming. Therefore, all of the software companies are going out of business. I said it’s exactly the opposite because there are going to be so many agents. The world is no longer limited by the number of people. Therefore, those agents are going to use more tools than ever. This is of course Jensen Huang speaking as reported by Bloomberg. Now, all of this back home sparked a rally in software stocks across Asia and Europe and of course India. And stocks like TCS and Infosys jumped more than 5%. Technology stocks have the third largest weight in the benchmark index. That’s Nifty50. And the Nifty50 was up 100 points today at 23,483 and the Sensex was up 382 points at 74,649. That was not how the day started because both the indices were much lower in the negative and then they swung around later in the day. In the broader markets, the nifty midcap and small cap were up 8 and 4% each. Oil prices were down more than a percent on Tuesday, losing some of the gains of Monday after Iran said it reviewed a proposed agreement with the United States to halt a war between the two countries. According to the Meah news agency of Iran, US President Donald Trump said on Monday that negotiations with Iran were continuing and there would be a deal to extend the ceasefire and reopen the state of Armas over the next week according to a Reuters report. And then a US delegation under the leadership of an assistant US trade representative for South and Central Asia are holding three days of talks that are on right now with our Indian counterparts to finalize a trade deal. The prospect of some closure on this deal was also seen as positive in the markets on Tuesday. A Bloomberg report says overseas investors cumulative net equity investments in India have fallen to a near 10-year low after relentless selling. Aggregate net investments by foreign portfolio investors in local stocks stood at about 730,000 cr rupes as of June 1st, the lowest level since 2016, Bloomberg said, quoting data from the National Securities Depository. The figure sums investments or withdrawals for each year since 1993 into Indian equities. Meanwhile, growth has been steady for Indian companies. The top 50 listed companies posted singledigit percent profit growth for the eighth straight quarter net profit of Nifty50 companies. and we pointed this out earlier as well rose 6.6% year-on-year in the 3 months ended March 31st according to Kotak institutional equities which is ahead of forecasts of a 2% growth and if it’s getting too hot outside relief may be close India’s annual monsoons could hit Kerala on the southern tip of the country on Thursday or around Thursday thus delayed by a few days are also favorable for the system to move into parts of neighboring Tamil Nadu at about the same time according to a note from the Indian Meteorological Department or the India Meteorological Department. Monsoons usually start in the 1st of June and the delay is the first since 2023 when rainfall came on the 8th of June. Uh Bloomberg report said the weather bureau initially predicted the monsoon would arrive on May 26th but did not elaborate on why there’s been a delay. The report also added as we know that rains usually run through September and deliver the bulk of India’s annual precipitation which is important for replenishing groundwater reserves and of course farming. There’s a new producer price index and this is for the first time also a step towards aligning with advanced economies giving policy makers a broader measure of inflation that captures price pressures across both goods and services in the country. The reading under the new index will be released on June 15th. Reuters quoted India’s principal economic adviser in the department for promotion of industry and internal trade speaking on Tuesday. Elsewhere, the Reserve Bank may have offloaded a portion of its gold holdings to shield its foreign currency assets from the cascading fallout of the war in West Asia. According to an analysis by Bloomberg Economics, based on publicly available data, the Reserve Bank of India likely sold gold reserves worth about 12 billion in the two weeks through May 22nd while buying $7.5 billion of foreign currency assets according to Bloomberg senior India economist. Same with currency rupee and dollar rupee forward premiums fell on Tuesday thanks to opposing forces of importer hedging foreign portfolio outflows and possible reserve bank intervention across forex market segments according to Reuters which added that the rupee ended at 95 rupees 26 per dollar down .3% from the previous session traders once again said the losses could have been steeper had it not been for the Reserve Bank’s dollar selling interventions.

Where could inflation land given high and potentially higher fuel prices? A new report from Crystal Ratings said they estimate the direct upside to inflation linked to consumer price index at about 36 basis points with a hike of 7 to 12 rupees per liter in petrol and diesel prices rising to 48 basis points if the retail fuel prices increase by 10 rupees. The report says producers face a dual cost shock with higher prices of crude, petroleum products and gas raising manufacturing costs. Transport is the major channel through which fuel inflation radiates across the economy. The report adds also saying that freight transport accounts for 54% of India’s logistics cost. Road transport represents nearly 71% of total freight movement. Fuel is the single largest component of road transport at 42% according to a NCER study. The report says that the increase in retail fuel prices will directly impact these freight cost structures and feed into prices across supply chains in coming months.

A new report from CBRE, one of the world’s largest commercial real estate services firms, says Duality brands are expanding rapidly with new retail stores and growing in size as well in India. Notably, this also reflects an increasing shift or an additional emphasis on physical for some brands who are so far only direct to consumer or digital. This also reflects other shifts in overall retail and store trends. The jewelry sector’s share of organized retail leasing has increased from about 2% in 2019 to about 8% in 2025 or in about 6 years placing jewelry amongst the top three demand drivers after fashion and apparel and food and beverage according to the CBR report. I reached out to Anuman magazine, chairman and co for India, Southeast, Asia, Middle East and Africa at CBRE and I began by asking him how he was seeing the latest trends including extending into the broader realm of retail.

Jewelry as you know in India is one of the gold jewelry especially is India is one of the largest consumers. But what is really happening is first of all the expansion if we what we track is how many jewelry stores are being taken up. How much leasing is happening. So like you mentioned you know that is going up every year and overall leasing you know from as low as 2% now it’s gone up to about 14% of what jewelry stores are leasing. So which means that demand is increasing and also the formats are changing. So earlier the jewelry stores were smaller now we seeing a percentage of jewelry stores are becoming larger 8,000 to 14,000 square ft above and what that also means is that the buying pattern is slowly changing and if we look at the jewelry section again sector is moving also from people buying jewelry for traditional reasons which is for example wealth preservation hedge against inflation to now people buying for fashion just for going to get together. So there is a quite a bit of shift in jewelry buying and interestingly the trend is that earlier as you would know large amount of jewelry buying would happen in weddings and that was the main purpose also besides of course hedge against inflation and wealth preservation today the wedding jewelry is about 50%. The rest is for gettogethers anniversaries gifts that’s a clear trend and movement and that also shows that retail as such is being focused on Gen Z. So even in jewelry there’s a shift from millennials to focus on Gen Z is changing the patterns of buying along

and it’s interesting you pointed out that the stores are becoming larger which means the experiential part is clearly increasing for something that could also be an investment as opposed to so what does that tell us about retail and retail trends overall once what you mentioned experience that’s extremely important retailers are using a technology for you know virtual like we used to do virtual tours in real estate but this is also looking at the products data is being utilized on assessing demand and what the customers want and that is reflecting in the design of the premises and to address all the customer needs. What we seeing in jewelry is that in India is a price sensitive market. So like in other retail there is shift towards providing to wider audience. So from traditional heavy jewelry expensive to for the younger people lighter jewelry what is preferred which can be not which is beyond attending weddings going to the office to anniversaries to parties and the whole price range also is there so that you know that’s how the retailers also making bit more money or trying to do better is to providing the whole range from the heavy jewelry to genz to the lighter jewelries and making experience an important part and using AI technology to making sure that they also do data analysis. What has happened is that as the gold prices have gone up, labor has gone up and that is another reason why there is a shift now besides to provide different kinds of products in different price ranges and if different carrots and different quality so that you know overall the market could expand.

What are the other sort of broader retail trends that you’re seeing anuman across the country right now? One trend which started since last few years is really overall retailers going into tier 2 tier three cities and if any retailer today in India wants to expand and scale up really there’s not much choice for them but to go to tier 2 tier three cities because of course the cost is lower but of course the sales volume also increases but the value could be lower but there’s a clear trend in detail that we have seen last few years two tier two two or three cities you know going after that. Second is that lot of the companies which started with only doing digital sales are moving to physical brick and mort stores D2C what we call and that trend is increasing the percentage of what they call it you know digital first retailers going into physical brick and mort stores is increased significantly so it also shows that initially when all this digitization was happening or technology is coming in there was a big scare that is retail brick and mortar will it going to die and I Remember even that time we saying look it’s going to coexist but that time it was bit of a theory. Today we have facts and figures to show that both online digital and physical stores are not only surviving together but you need both. So they are interdependent completely and the trend of leasing of space by digital or the first the companies started in digital and are taking physical space is increasing. In fact, this has really started going up from last year and I think that trend is going to stay

right. What are the kind of demand signals that you’re seeing? I mean both from let’s say people who are taking up leases across retail that is across retail in malls and elsewhere. What is the kind of consumer signals they’re seeing particularly in the last few months? If so

from the supply side there’s a problem because of West Asian war going on. It is impacting every business include retail because there is a supply chain disruption. There is a challenge on the labor front. There’s labor shortages. On top of it, if you look at the gold prices have gone up. There’s been a duty of 15% levied on gold and the rentals frankly because there’s a shortage of quality retail space. The rentals have also gone up. That one side was a challenge. On the consumer side, if you look at overall in India, our per capita income as an average is still low. But of course, if you look at the main cities, there is consumption. But at the same time, like I mentioned is a price sensitive market. So the retailers are also providing for the entire spectrum but certainly with inflation with the cost going up the jewelry and all goes beyond lot of consumers and that’s why we see in jewelry again lab grown diamonds to lower carriage of lighter jewelry to address that market but certainly right now for all business include retail supply chain is a and labor shortages are two major challenges here

right we talked about how jewelry is growing within the retail universe are there any newer entrance that you’re seeing either right now or on the horizon into retail in India or maybe into other cities or types of cities.

Fashion apparel still dominant. What we are seeing is that besides few international names where lot of domestic companies, startups, young people are bringing in and of course it’s accelerated because of digital space. So nowadays we’ve seen a lot of youngsters will set up their talented designers and they just go online start and then maybe move on to physical space. So I think the pace of that is quite high. Besides that FNB is a major part of the business as you know FNB is expanding in a significant manner. Again the younger people and the whole the entire shift of people going out FNB is also tied to entertainment. So FnB and entertainment are actually growing at accelerated pace. So I would say fashion and apparel and FNB and entertainment are clearly the dominant players in the retail space. So would you say that FNB and entertainment are let’s say more recessionp proof relatively I mean is there any sign of that

to large extent they are recession free because again in most of the Indian cities there’s if you look at entertainment there are relatively limited choices so FNB becomes important entertainment so they can down cycles they can pair better than the sectors no doubt

right Anjuan thank you so much for joining me

thank you

and before we continue a short break.

[Promotional segment for “How India’s Economy Works” podcast with Puja Mehar]

And now back to the show.

That was the core report with me Govindraj Ethi. Do stay connected with more of our coverage at the core. You can check out our website or sign up to our newsletter for our exclusive stories, one in-depth feature a day on www.thecore.in. Do also track us on LinkedIn where we usually post synopsis or extracts of our top stories and interviews. We would love your feedback on how we can make business more interesting and relevant including of course India’s vibrant manufacturing sector. So write to us at feedback@thecore.in. And thank you once again for listening.