India finds itself at a unique, even historic, moment in the global artificial intelligence (AI) race. It is home to an even greater concentration of AI-skilled professionals, compared to the global average. India already has a workforce 2.5 times more skilled in AI. This remarkable workforce makes the country a powerful actor on the vibrant technology-driven economy. Yet even with these benefits, the country is grappling with a lack of infrastructure and investment that threaten to stop its development.
Over the last three decades, India’s information technology (IT) services sector has powered economic expansion. That booming industry has produced millions of new jobs. This success has provided a solid springboard for India’s grand ambitions in the AI realm. The Indian government realized this and launched a national, ambitious mission on AI about 18 months back. Their aim is to create a massive, locally-grown AI model to tap into that potential. This sovereign AI model proudly supports more than 22 languages. It is a reflection of India’s deep commitment to building its capacity in this area.
India places very highly – either first or second, depending on the index – in terms of AI talent and developer activity. The nation has reaped billions of dollars of direct investments by data center operators, solidifying its technological infrastructure even more. Most significantly, India’s AI startups accumulated $1.16 billion in private funding last year. This number is miniscule in comparison to the more than $100 billion in capital American startups have raised. It’s a drop in the bucket compared to the almost $10 billion China raised.
India newly incubated 74 funded AI startups in 2022. This number is tiny compared to the 1,050+ startups funded in the US in the same period. The recent boom in AI-powered consumer applications is backed by venture capital investments in AI startups, which have more than doubled compared to last year’s overall figures. With growth in India’s IT back-office sector slowing and wages plateauing, the country needs to find new frontiers within AI.
Perhaps India’s biggest strength doesn’t lie in the direction of building expensive language fashions. Instead, it’s in using these models to advance the pace of entrepreneurship. As Shailendra Singh pointed out, “I think short term, you know there’s this really large concentration of AI in the US. Over the next five to ten years, AI will change the entire process of creating new companies. It would do so for a more diverse array of entrepreneurs than ever before. Millions of small, diverse founders and entrepreneurs will be the lifeblood of their communities. This increase will have a profound effect on developing countries such as India and the Asia-Pacific.
India’s potential is tremendous, but it is held back by a lack of computational infrastructure. It misses the billions in research and development dollars that have fueled innovation here in the US and over in China. The Indian government is doing its best to stay ahead of these challenges. They’re scrambling to migrate away from foreign platforms due to fears of surveillance and sanctions.
Although India’s sovereign AI mission is ambitious, it represents a mere shadow of programs in other countries, such as France’s $117 billion initiative and Saudi Arabia’s $100 billion plan. The $1.25 billion allocated for India’s mission underscores the need for greater investment to bolster its competitiveness on the global stage.
India’s overseas work visa prospects have been tightened recently. First, it helps the country keep its skilled talent at home and bring Indian origin professionals back home. An EY report emphasized that “attractive policy incentives need to be put in place to incentivise relocation to India,” highlighting the importance of creating an environment conducive to talent retention and growth.
Mechanisms of financial support will provide the basis for an equitable, broadly beneficial Indian AI future. These can take the form of direct subsidies, tax incentives, and subsidized or guaranteed funding for research and development. Nandan Nilekani pointed out that “the hardest places to make artificial intelligence work are the places where it matters most.” He is confident that if AI can work well in India’s classrooms, clinics, and farms, it can eventually work anywhere in the world.
As you know, global players have been pouring billions into AI technology. To successfully navigate an AI-first future, India needs to make these a priority and take advantage of the tremendous multiplier effect they afford. Satya Nadella emphasized this need by stating that efforts are essential “to help build the infrastructure, skills, and sovereign capabilities needed for India’s AI-first future.”