India is struggling to be competitive in the increasingly competitive area of generative AI. Despite having a bustling technology arena and numerous startups, the South Asian country has not seen significant advancement in the AI world.
Despite startups in India receiving $4 billion in funding, no local businesses have risen to compete with the massive language model corporations OpenAI’s ChatGPT, Anthropic (backed by Google Ventures), and Google’s Bard. Sanford C. Bernstein analysts reported that India is not winning the AI development revolution.
Kudos to a number of India’s noteworthy new companies for making use of machine learning in their business operations. For example, the leading e-commerce firm Flipkart uses machine learning to optimize shoppers’ experiences, and Razorpay utilizes AI to battle scams related to payments. What’s more, the inspiring edtech ‘Unicorn’ Vedantu just inserted AI into its real-time classes, making them easier to access and more cost-effective.
Industry experts believe that the lack of AI-first startups in India is due in part to a lack of skills among the country’s employees. Now, analysts are cautioning that the emergence of generative AI could put many service jobs at risk.
Out of the over five million workers employed in the Indian IT sector, there is still a large portion of lower-tier employees such as those who work in the BPO area or are involved with system maintenance. Despite not being at the point where they are causing massive disruption yet, the processes are advancing quickly; in fact, when we posed our query to ChatGPT, the response we got was progressively evolved only a few days later, according to Bernstein analysts.
Dev Khare, a Partner at Lightspeed Venture Partners India, recently examined the revolutionary capacity of AI and cautioned that occupations and procedures in ventures, such as market research, content production, legal analysis, financial analysis, and various IT services jobs may be affected.
Even though this interruption is difficult for India, it also shows a chance for improvement. The rapidly advancing agriculture sector demands to be met, and the manufacturing industry may not have to depend heavily on automation due to the ample and cost-effective labor force.
By developing relevant skills in a timely manner and making the most efficient use of resources, the services sector looks likely to gain the greatest advantage and see an increase in productivity. Leading Indian consultancy firms are beginning to recognize this, as evidenced by Infosys sharing last month that it has multiple Artificial Intelligence endeavours underway to tackle certain areas within clients’ organizations. Their rival, TCS, are investigating multifaceted solutions to automate aspects such as the production of code, writing content, and marketing.
New Delhi has announced that India will refrain from controlling the expansion of Artificial Intelligence – a stance different from the majority of other nations.
AI is a tool that facilitates the digital economy and encourages the development of innovative ideas. The Indian Ministry of Electronics and IT recently announced they intend to use AI to personalize and improve customer service through digital public channels.
A bright prospect
Although the more established part of India’s startup environment has not yet had major success in the arena of AI, younger businesses are beginning to take up the challenge.
A fresh wave of businesspeople is taking advantage of the excitement around generative AI technologies. Companies like Gan, which helps companies to remake videos in bulk, TrueFoundry, which helps make ChatGPT using their own data, and Cube, which provides AI-driven customer assistance on social media, are some of the pioneers in this area.
A great deal of anticipation has caused nearly all venture capital firms in India to devise plans of action in relation to the growing sector.
Anandamoy Roychowdhary, who is affiliated with Surge, Sequoia India & Southeast Asia, noted that Indian startups have just recently begun to investigate the possibilities of using generative AI, but he also pointed out that several of them have already been devoting considerable time to this science for a number of years.
There’s no question that the rise of ChatGPT has had a significant positive impact on the launching of projects and startups. The Sequoia India and SEA teams have taken this opportunity to get ahead of the trend, investing in 7-8 AI companies that have gone through the Surge program.
Sequoia India and SEA are analyzing a minimum of five companies in this field per week according to him.
Accel declared on Wednesday that Artificial Intelligence is one of the two primary subjects that their early-stage venture program is focusing on, as the venture firm has been vigorously operating in India for over ten years.
Some founders have worries that AI startups may not work to develop substantial language models because there is not enough financing from people investing and doubt that the costly requirements for compute and other hardware will be supplied.
A person who wishes to remain unidentified voiced their concerns that the current enthusiasm for AI agreements is reminiscent of the mania for cryptocurrencies seen in 2021.
The speaker commented that all the people are hyped up over the idea of “genAI” but don’t really have any idea what to do. They compared the situation to the “crypto arms race” that happened before. They also said they doubted most Indian VCs had done the research and truly understood cryptocurrency, otherwise they wouldn’t have made so many bad investments.