India’s AI Ascent: Aiming to emerge as a global leader in the $300 billion market

In the race to dominate the rapidly expanding Artificial Intelligence (AI) sector, India stands poised to become a formidable contender. The country, renowned for pioneering the $250 billion IT outsourcing industry, possesses key advantages, including one of the world’s largest pools of IT and engineering talent and a rapidly growing domestic market. 

Despite facing challenges like job displacement and a lack of infrastructure for Large Language Generative AI models, experts believe India can harness its strengths to compete globally.

The global market for AI software is projected to reach $297 billion by the year 2027, with India’s demand for AI services alone estimated to be worth $17 billion in that year, according to a report by IT industry body Nasscom and consultancy BCG. 

To achieve this, India must navigate the disruptive impact of AI on jobs, extending from call center outsourcing to programming. 

Unlike the US and China, India at present lacks the infrastructure for training large-language generative AI models, necessitating the development of smaller platforms. However, industry leaders are optimistic that Indian firms can eventually compete with global giants like OpenAI and China’s Baidu Inc.

Mustafa Suleyman, the co-founder of DeepMind Technologies, emphasised the trend towards building eye-wateringly Large Language Models (LLMs) but noted that smaller, cheaper-to-run, open-source models can also be effective. 

A consortium backed by Mukesh Ambani’s Reliance Industries and top engineering schools aims to launch a ChatGPT-style service, showcasing the collaborative efforts in India to develop AI models tailored to local needs.

Start-ups like Sarvam and Krutrim, supported by venture capital investors including Lightspeed Venture Partners and Vinod Khosla, are actively contributing to the open-sourced AI model ecosystem in India. 

While global companies like OpenAI are focusing on larger LLMs, Indian initiatives are overcoming computational and cost constraints, catering to smaller businesses and government departments.

Fei-Fei Li, a computer scientist renowned for her work in computer vision, stressed the importance of incorporating AI as a tool in every aspect of business and learning. As India’s IT industry, contributing eight per cent to the country’s GDP and employing 5.5 million, grapples with the impact of AI, industry leaders are calling for a paradigm shift in thinking and training methods.

Despite short-term challenges, Microsoft Corp CEO Satya Nadella sees AI as a “perfect storm” for India, presenting an unprecedented opportunity for economic growth. As India navigates the complexities of AI adoption, its success in this transformative technology could position it as a global leader in the $300 billion AI market.