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India to invest Rs 10,372 crore in AI infrastructure, startups for five years


MUMBAI: India will invest Rs 10,372 crore in a wide range of artificial intelligence projects for five years as the world's most populous country stakes a claim to the burgeoning sector.

The funds will be used to set up computing infrastructure and help finance AI startups, a statement from the information technology ministry said late Thursday.

The mission will be implemented through the IndiaAI Independent Business Division (IBD) under the Digital India Corporation (DIC).

"PM (Narendra) Modi Ji has democratised technology. With the AI mission, he will make compute power available to innovators, startups, students, and educational institutions," union IT and communications minister Ashwini Vaishnaw said in a statement.

The minister, briefing reporters after the Cabinet meeting, said supercomputing capacity, comprising over 10,000 GPUs (graphics processing unit), will be made available to various stakeholders for creating an AI ecosystem. The demand for GPU-based servers has increased as they can process data at a higher speed compared to CPU-based servers.

Startups, academia, researchers and industry will be given access to the AI supercomputing infrastructure established under the India AI Mission, the government said.

MoS MEITY Rajeev Chandrasekhar said the investment "will catalyse India's AI ecosystem and position it as a force shaping the future of AI for India and for the world."

An India AI Innovation Centre (IAIC) will be set up under the mission. The IAIC will be a leading academic institution, ensuring streamlined implementation and retention of top research talent.

Funds approved by the Cabinet will enable IAIC to spearhead the development and deployment of foundational models, with a specific emphasis on indigenous Large Multimodal Models (LMMs) and domain-specific models, leveraging edge and distributed computing for optimal efficiency.

The financial outlay will fortify the India AI Startup Financing mechanism, facilitating streamlined access to funding for budding AI startups and catalysing their journey from product development to commercialization.

"The proposal also includes funding provisions for industry-led AI projects aimed at fostering social impact, propelling innovation and entrepreneurship," an official statement said.

A National Data Management Office will be set up under the mission that will coordinate with various government departments and ministries to improve the quality of data and make it available for AI development and deployment.

Working groups formed by the government on AI have recommended setting up a three-tier compute infrastructure, comprising 24,500 GPUs.

India's nascent AI market will be worth USD 17 billion by 2027, according to current forecasts by local IT industry body Nasscom. That figure represents a tiny slice of the global market for AI software, which US research firm Gartner said could touch USD 297 billion by the same year.

India boasts a vast software services industry built on the global outsourcing boom beginning in the 1990s, and AI software represents both an opportunity and a threat. Engineering graduates working in traditional call centre or coding roles could see their jobs threatened by AI models.

At present, the US and China lead in the computing infrastructure required for the development of AI technology.

According to the Top 500 website, top-performing supercomputers are located in the US, Europe, Japan, China, South Korea, and Saudi Arabia, where purchasing power parity is high.

As per the Top 500 list issued in November 2022, China had 162 supercomputers, followed by the US with 127, while India had three.

According to industry estimates, NVIDIA dominates the GPU market with about 88 percent market share and there is a lag of 12–18 months in getting GPUs from the company due to its high demand across the globe.

The AI working groups have recommended setting up best-in-class AI computing infrastructure at five locations with 3,000 AI Petaflops computing power, with 15 times more capacity than the highest capacity installed at present.

The groups have recommended setting up an Inference Farm (2,500 AI PF) and Edge Compute (500 AI PF) systems.

The government has already spent Rs 1,218.14 crore in the last eight years to set up 24 PetaFlops compute capacity under the National Supercomputing Mission.

In the race to develop AI capacity, Microsoft provided Open AI with a USD 1 billion investment in 2019 and a USD 10 billion (about Rs 82,000 crore) investment in 2023.

IBM alone invested USD 6.5 billion (about Rs 5300 crore) in research, development and engineering to innovate in the fields of AI, hybrid cloud and emerging areas such as quantum in 2022.

OpenAI chief executive Sam Altman told an audience in New Delhi last year that Indian entrepreneurs and companies would struggle to build AI products without significant financial backing.

India's public and private sectors have made initial attempts at creating AI applications.

A partnership between billionaire tycoon Mukesh Ambani's Reliance Industries, India's largest company by market capitalization, and the country's top universities is expected to roll out a ChatGPT-style chatbot application this month.

(With inputs from AFP and PTI)