Jan 30 (Reuters) - India's IT minister has praised

Chinese startup DeepSeek for shaking up the sector with its

low-cost AI assistant, likening its frugal approach to his

government's efforts to build a localized AI model.

India announced a $1.25 billion AI investment in March,

dubbed IndiaAI mission, which includes funding for AI startups

and developing its own AI infrastructure.

"Some people question the amount of investments the

government has committed in (IndiaAI mission). You have seen

what DeepSeek has done? $5.5 million and a very very powerful

model. Because, the use of brain," Ashwini Vaishnaw said on

Tuesday at an event in the eastern state of Odisha.

DeepSeek has triggered a dramatic rethink on artificial

intelligence spending around the world, claiming it took just

two months and cost under $6 million to build an AI model using

Nvidia's ( NVDA ) less-advanced H800 chips.

Downloads of its app recently surpassed OpenAI's ChatGPT on

Apple's App Store, while the cost and performance of its tools

upended industry beliefs that China was years behind U.S. rivals

in the AI race.

Vaishnaw's statement appeared to target comments made by

OpenAI's Sam Altman during a visit to India last year, when he

cast doubt on the possibility of an Indian team being able to

build a substantial model in the OpenAI space with a $10 million

budget.

"The way this works is we're going to tell you it's totally

hopeless to compete with us on training foundation models. You

shouldn't try. And it's your job to like try anyway. And I

believe both of those things," he said, comments which are now

in focus again on online platforms such as X after DeepSeek's

success.

Altman is due to visit India again on February 5, just as

his company is currently locked in a court battle in the country

with digital news and book publishers over copyright breaches.