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Business News›Tech›Newsletters›Morning Dispatch›a16z’s Raghuram isn't writing off India AI yet; insurers weigh new rules

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a16z’s Raghuram isn't writing off India AI yet; insurers weigh new rules

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Happy Monday! a16z’s Raghu Raghuram said India can build frontier AI companies by using its talent. This and more in today’s ETtech Morning Dispatch.



Also in the letter:

■ Infy’s new hiring strategy

■ Prosus in talks to back BazaarNow

■ New deeptech fund



“Too early in the cycle to write off India in AI": Andreessen Horowitz's Raghu Raghuram





Raghu Raghuram, managing partner, a16z



India has few frontier AI model companies and limited computing capacity, but according to a16z managing partner Raghu Raghuram, the country should not be written off. In an interview with ET, Raghuram said Indian startups could first build services on open-weight models before eventually developing their own.



India's strengths: "We know India has the talent. We know that as computing spreads, the models are going to change and there's going to be an opportunity for new ones. By now, the recipes for building good models are known," he said, adding, that "some day there can be" big model companies from the country.



Also read | Insurance mis-selling is arising because upfront commissions are too high: IRDAI chairman Ajay Seth



Machine Age Fund: The former VMware CEO, who helped steer its $69-billion sale to Broadcom, now co-leads a16z’s $1.1-billion Machine Age Fund with Martin Casado.



When asked why a separate fund for hardware and infrastructure startups, Raghuram said, "Demand for compute capacity is growing at triple digits and supply is growing at double digits on average. And if you ask any AI-native company what is holding them back, they all say we need more compute."



Taking on competition: “Historically, the chip industry has moved in cycles. But two things have happened. One, the nature of the problem has changed so dramatically. The AI workload behaves in a very different way than conventional computing workloads. And second, this is not something that's going to be a five-year cycle. We are literally talking about, who knows, 30-40-year cycles,” he said.



Also Read: Tech elite's new school Horowitz Andreessen Academy aims to replace university



IRDAI commission caps put insurance distributors' renewal income in focus

Insurance distributors plan to ask the insurance regulator whether the commission caps proposed on September 23 will apply retrospectively to existing policies and their future renewal payouts, people in the know told us.



What this means: Companies are expected to raise this in their submissions to the regulator’s consultation paper. A retrospective application could cut future renewal income instead of limiting the impact to new policies sold after the rules take effect.




The caps could squeeze earnings at companies such as PB Fintech, Turtlemint and InsuranceDekho while also affecting insurance distribution income for banks and non-banking financial companies.



Number game: For online distributors, renewal commissions are a significant part of economics, especially for long-duration health and life policies.

• Almost 90% of PB Fintech’s operating revenue comes from insurance commissions. In 2025-26, it earned Rs 6,089 crore from commissions, including Rs 935 crore from policy renewals.
• Turtlemint’s renewal commission revenue was Rs 225 crore in 2025-26, about 20% of its Rs 1,098 crore operating revenue.

Proposed structure: IRDAI has proposed product-complexity-based caps rather than a single uniform limit. For individual health policies in general insurance, the draft suggests:

• First-year commission: 15% for distribution entities, 20% for agents.
• Renewal commission: 5%.
• Portability commission: 10%.

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