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THE AI EXCEPTION: CHINA AND INDIA DEFY EM PRIVATE MARKET SLOWDOWN

Most emerging markets saw private investment pull back in the first quarter of the year, but China and India stood apart - riding a wave of enthusiasm for AI, according to data from the Global Private Capital Association (GPCA).

Despite private capital investment across EMs (excluding South Korea) falling to $33.9 billion in Q1 from $48.25 billion a year ago, venture investment emerged as a bright spot, jumping to $15.2 billion - the highest since Q4 2022.

The rebound was driven by China, where deal value hit $9 billion, a multi-year high. Notably, 60% of that capital was deployed to AI, robotics and biotech, data showed.

A near-record $5 billion was deployed to digital infrastructure deals. Among the largest: India's HyperVault - a joint venture between Tata Consultancy Services TCS.NS and private equity firm TPG TPG.O to develop data centers, backed by roughly $2.03 billion in equity - and Bharti Airtel-owned BRTI.NS Nxtra Data, which raised $1 billion from a group of investors.

"There is a durable long-run opportunity in markets outside the U.S., where persistent gaps in digital and energy infrastructure will serve pent-up demand from businesses and consumers for basic services – before you even get to AI anticipation," said Cate Ambrose, CEO of GPCA.

Private investment sentiment took a hit earlier this year after the collapse of several companies including U.S. auto parts supplier First Brands and British lender Market Financial Solutions - stoking broader concerns over the health of private markets.

But investor appetite for AI and AI-adjacent companies has proved resilient, with capital chasing almost anything remotely connected to the technology.

Outside Asia, PE firm Warburg Pincus plans to invest up to $1 billion in Brazil's Global Eggs.

(Purvi Agarwal)

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