Generative AI is more ingrained within the Indian ecosystem than you’d think—with 73% of Indians using generative AI. And why not? This technology is a subset of artificial intelligence that can create new text, images, music, and more.
Let’s deep-dive a little to understand the opportunities and challenges Generative AI technology poses for the Indian technological landscape.
The growth of Generative AI in India is unparalleled. According to NASSCOM, Indian startups in Generative AI have been doubling since 2021 and have received a staggering $475 Mn funding in the last 2 years. IDC also claims that India’s expenditure on AI will reach $3.6 billion by 2026, at a CAGR of 34.3%
The real question is: What’s fueling this momentum?
Here are a few possible factors:
Applications of Generative AI technology in India are second to none. Industries across the board are leveraging this technology to offer new innovative products, improve existing offerings, or automate productivity-leaking tasks:
Despite Generative AI still being in its nascent stages, its applications will become endless as the technology advances.
Indian startups in Generative AI have garnered eyeballs and for the right reasons. In 2022, researchers from India contributed to the development of large language and multimodal models for the first time ever. This makes sense as India has the highest AI skills penetration rate (3.2) as per LinkedIn:
Alt-text: Relative AI Skills Penetration Rate
The number of generative AI startups has more than doubled between 2021 and 2023. Currently, India has around 60+ generative AI startups, all of whom are developing edgy solutions in-house. Some examples include:
Generative AI is turning out to be the game-changer Indian startups need to compete on a global scale and drive product innovation like never before.
As is the case with any technology, generative AI also poses challenges for Indian startups:
Alt-text: Major Challenges Faced by Global/Indian Generative AI Startups
Lack of high-quality training data, funding, and computing infrastructure are the top three challenges for generative AI startups in India.
However, there’s plenty of room for market growth and investment opportunities for generative AI technologies. The generative AI market share in India will supposedly reach US$ 13.2 billion by 2033.
Increasing adoption of artificial intelligence and machine learning applications across multiple industries is driving this growth. Plus, there’s an uptick in the applications and services space:
Alt-text: Increasing AI Adoption in the Applications and Services Space
Here’s a quick snapshot of the investment and growth for India’s AI startup ecosystem:
Alt-text: India’s AI Startup Ecosystem: At a Glance
Today, generative AI startups are diversifying across categories and specifically targeting data-driven whitespaces in text+image, image+video, audio+video, and so on.
The rapid adoption of generative AI technology in India is cause for three primary ethical concerns:
1. Data Privacy: Indian AI startups need stricter data protection laws and transparent data usage policies. Generative AI systems may use people’s images and videos without their consent–a big mistake. AI startups must have mechanisms in place for consent and inform customers about how their data is being used.
2. Bias and Fairness: Generative AI models can inherit biases present in the training data–a big concern for a diverse and multicultural country like India. The output can be misleading or inaccurate.
3. Regulations and Policies: India must also establish clear and comprehensive regulations governing generative AI. These regulations should cover the full spectrum, from data privacy and bias to accountability, transparency, and security.
The future of Generative AI in India is positive and profitable. An IPSOS survey suggests that 71% of Indians feel positive about AI products:
Alt-text: How Countries Worldwide Feel About Using AI Products
Furthermore, 74% of Indian startups are generative AI natives, with a majority of them having launched between 2021-22, reflecting the confidence of companies in the growth potential of the technology:
Alt-text: Percentage of Native Generative AI Startups in India
Around 79% of Indian Gen AI startups prefer to build products in-house–demonstrating their risk appetite and need to leverage AI as a competitive edge.
This is why government support is critical to fostering development and even accelerating it. Here’s how the government can help:
The writing is on the wall: Generative AI is no longer a niche technology; it is very much a mainstream technology now–one that will only integrate deeper into our lives as AI becomes synonymous with convenience, cost-efficiency, and productivity.