Survey highlights dominance of SaaS and customisation in Indian AI start-ups

A recent survey by SenseAl Ventures, a key investor in AI start-ups since 2017, reveals significant trends in the Indian AI startup ecosystem. The survey underscores the dominance of the SaaS business model and a strong preference for cloud-based AI solutions, reflecting the industry’s recognition of AI’s potential to meet specific business needs.

The findings are detailed in SenseAl Ventures’ whitepaper, Artificial Intelligence: Beyond the Hype, which explores AI’s transformative impact across industries, the evolution of foundational models, and significant investments in AI infrastructure. Notably, major tech firms like Nvidia, Microsoft, Google, and Amazon Web Services have invested $17 billion in foundational AI models, driving GPU sales to $50 billion in 2023. This trend is expected to catalyze explosive growth in AI applications, likened to how physical infrastructure spurs economic development.

The survey, conducted among 100 Indian AI startup founders, highlights the growing demand for customised AI solutions, emphasising the technology’s capacity to address enterprise-specific growth needs. Cloud solutions and OpenAI’s GPT-40 are identified as leading technologies, indicating reliance on cloud infrastructure and large language models. Founders also consider fine-tuned models, proprietary algorithms, and unique data as critical intellectual properties, underscoring the importance of customisation and domain-specific expertise.

However, challenges such as high infrastructure costs, solution complexity, and limited understanding of AI’s implications were noted. Data security, generative AI bias, and data availability were identified as significant risks, highlighting broader societal and ethical challenges. Technologies like Explainable AI, AI agents, and Quantum Computing are seen as potential game-changers.

The whitepaper projects substantial investments in AI for healthcare diagnostics ($18.8 billion by 2027) and fraud management ($57.1 billion by 2033). AI adoption is poised to double market share and enhance efficiency tenfold by 2024. India, with its talent pool, entrepreneurial drive, and data wealth, is well-positioned to lead this AI revolution, according to SenseAl Ventures.

SenseAl Ventures, with a portfolio of 12 high-potential start-ups, is committed to advancing India’s AI leadership, leveraging national strengths to develop innovative solutions for global markets.