Where is India in the generative AI race?

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India’s thriving tech ecosystem faces an uphill battle to catch up with global leaders in a great race for supremacy in the burgeoning field of generative AI. Despite being home to one of the world’s largest startup ecosystems, the South Asian economy has yet to make a significant impact on the rapidly advancing AI sector.

No Indian competitor has emerged to challenge the dominance of large-scale language model giants such as OpenAI’s ChatGPT, Google Ventures-backed Anthropic, and Google’s Bard. Sanford C. Bernstein analyst said:

Many of India’s leading start-ups are using machine learning to enhance aspects of their business operations. For example, e-commerce giant Flipkart uses machine learning to improve customers’ shopping experience, and Razorpay uses his AI to combat payment fraud. Vedantu, an online tutoring platform, recently integrated AI into its live classes, making them more accessible and affordable.

Industry insiders believe one reason for India’s lack of AI-first startups is the skills gap in the country’s workforce. Now, analysts warn that the emergence of generative AI could replace many service jobs.

“Among more than 5 million employees, India’s IT sector still includes many low-end employees such as BPO and system maintenance. (Our queries on ChatGPT provided more evolved responses within days),” Bernstein analysts said.

Dev Khare, a partner at Lightspeed Venture Partners India, recently evaluated the disruptive potential of AI in industries such as market research, content creation, legal analysis, financial analysis and various IT service jobs.

But for India, this turmoil is also an opportunity. Rapid expansion of the agricultural sector, which employs more than 40% of the country’s labor force, will be difficult, and likewise automation in manufacturing may be unnecessary for an abundant and affordable workforce.

With timely upskilling and resource optimization, the service sector stands to benefit the most and increase productivity. Giant Indian consultancy firms are already aware of it. Infosys, for example, revealed last month that it is working on several generative AI projects to address specific aspects of its customers’ businesses. Meanwhile, TCS is exploring cross-industry solutions for automating code generation, content creation, copywriting, and marketing.

In response to the situation, New Delhi has taken a different approach than many other countries, declaring that India will not regulate the growth of AI.

“AI is the dynamic enabler of the digital economy and innovation ecosystem. Governments are harnessing the potential of AI to deliver personalized, interactive, citizen-centric services through digital public platforms.” , said the Ministry of Electronics and Information Technology of India last month.

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A more established segment of the Indian startup ecosystem has yet to gain momentum in the generative AI race, so young companies are stepping into the opportunity.

A new generation of entrepreneurs is capitalizing on the enthusiasm surrounding generative AI technology. Startups such as Gan, which allows companies to re-use videos at scale, TrueFoundry, which uses proprietary data to help build his ChatGPT, and Cube, which facilitates AI-powered customer support on social media, are working on this. He is one of the leading companies in the field.

Growing interest has led nearly every venture fund in India to formulate an investment strategy in emerging areas.

Anandamoy Roychowdhary, partner at Surge, Sequoia India & Southeast Asia, denied that Indian startups are just beginning to explore applications related to generative AI, saying that several companies have been working in the field for years. said.

“However, the pace of project and startup creation since ChatGPT’s launch has been impressive. of AI companies,” he told TechCrunch.

Sequoia India and SEA evaluate at least five companies in this sector every week, he said.

Accel, another high-profile venture firm that has been in India for more than a decade, said on Wednesday that AI is one of the two main themes in a new cohort of its early-stage venture program.

However, some founders have expressed concern that these AI startups are unlikely to focus on creating their own large-scale language models. This is due to the lack of funds and investor belief in supporting the high costs of computation and other infrastructure.