In the high stakes race for supremacy in the growing field of generative AI, India’s bustling tech ecosystem faces an uphill battle to catch up with global leaders. Despite being home to one of the largest startup ecosystems in the world, the South Asian economy has yet to make a material impact in the rapidly advancing AI field.
No local Indian contender has emerged to challenge the dominance of big language modeling titans such as OpenAI’s ChatGPT, Google Ventures-backed Anthropic or Google’s Bard. “Although there are over 1500 AI-based startups in India with over $4 billion in funding, India is still losing the AI innovation battle,” said analysts at Sanford C. Bernstein.
To their credit, many of India’s top startups are using machine learning to improve aspects of their business operations. For example, e-commerce giant Flipkart uses machine learning to refine customer shopping experiences, while Razorpay uses AI to combat payment fraud. Unicorn edtech Vedantu has recently integrated AI into its live classes, making them more accessible and affordable.
Industry experts attribute the dearth of early AI startups in India, in part, to a skills gap in the country’s workforce. Now, the arrival of generative AI could displace many service jobs, analysts warn.
“Among its more than 5 million employees, IT in India still has a high mix of low-end employees such as BPO or system maintenance. While AI is not at the level of causing disruption, systems are improving rapidly (our ChatGPT query provided a more evolved response within days),” Bernstein analysts said.
Dev Khare, partner at Lightspeed Venture Partners India, recently assessed the disruptive potential of AI and warned that jobs and processes in industries such as market research, content production, legal analysis, analytics finance and various IT services jobs could be affected.
However, for India, this disruption also presents an opportunity. A rapid gain in the agricultural sector, which employs more than 40% of the country’s workforce, is a challenge, and similarly, automation in manufacturing may be unnecessary due to abundant labor and affordable

Employment mix of low, medium and highly skilled workers at TCS, Infosys, Wipro and HCL (Image and data: Bernstein)
With the timely improvement of skills and optimization of resources, the service sector is the one that benefits the most and boosts productivity. Indian consulting giants are already recognizing this. Infosys, for example, revealed last month that it was working on several generative AI projects to address specific aspects of clients’ businesses. TCS, on the other hand, is exploring cross-industry solutions to automate code generation, content creation, copywriting and marketing.
In response to this landscape, New Delhi has declared that India will not regulate the growth of AI, taking a different approach from many other countries.
“AI is a kinetic enabler of the digital economy and innovation ecosystem. Government is harnessing the potential of AI to deliver personalized and interactive citizen-centric services through digital public platforms,” said the India’s Ministry of Electronics and IT last month.
Light of hope
As the more established segment of India’s startup ecosystem is yet to make a splash in the generative AI race, young companies are rising to the occasion.
A new generation of entrepreneurs is capitalizing on the excitement surrounding generative AI technologies. Startups like Gan, which enables businesses to repurpose videos at scale, TrueFoundry, which helps build ChatGPT with proprietary data, and Cube, which facilitates AI-powered customer support on social media, are among those leading the charge.
The surge in interest has led almost all venture funds in India to develop investment strategies in the emerging space.
Anandamoy Roychowdhary, partner at Surge, Sequoia India and Southeast Asia, pushed back that Indian startups are just beginning to explore applications around generative AI, saying several have been working in this space for many years.
“What cannot be denied, however, is the spectacular pace of projects and business creation after the launch of ChatGPT. The Sequoia India and SEA team has been early on this trend, having partnered with 7-8 AI companies from previous Surge cohorts,” he told TechCrunch.
Sequoia India and SEA are evaluating at least five companies in this space every week, he said.
Accel, another high-profile venture firm that has been operating in India for more than a decade, said on Wednesday that AI is one of two major themes for the new cohort of its early-stage venture program.
However, some founders expressed concern that these AI startups are unlikely to focus on building their own large language models due to a lack of funding and investor conviction to bear computational expenses and other such high infrastructures.
One investor, who requested anonymity to speak candidly, warned that the current frenzy around AI deals somewhat echoes aspects of the crypto craze in 2021.
“Everyone wants to do genAI but no one knows how/what to do. This is the crypto arms race all over again,” the person said. “I doubt most Indian VCs have ever dug deep and understood crypto, because otherwise they wouldn’t have made so many totally crap investments.” .
Source link
In today’s world of Artificial Intelligence, countries around the world are working hard to innovate and remain at the forefront of cutting edge technology. India is one of these countries, and the race to be a leader in generative AI is entering a crucial stage. At Ikaroa, we understand how important it is for India to make specialized advances in the field of generative AI – to stay ahead of the game and to remain a top player in this constantly evolving tech world.
Generative AI is a special branch of AI that focuses on generating new content, often in the form of text, images or audio, using an entirely automated process. Indians are in the midst of a technology revolution, with a recent surge in the use of AI. From automated customer service on e-commerce sites to the use of AI in banking processes, India is showing the world its AI capabilities.
Generative AI is an exciting new application that has the potential to revolutionize the way companies work. Its ability to learn a language or generate ideas automatically has caught the attention of investors and technology experts around the world. At Ikaroa, we believe in the potential of this technology, and are committed to helping India act as a leader in this domain. We are working closely with experts and government bodies to ensure that India stays ahead of the competition in the generative AI race.
Our team is helping to educate businesses on the potential of generative AI, along with developing their practical skill sets and implementation. We are also providing businesses with customized AI solutions, helping them to effectively utilize generative AI for various applications. With our expertise, we believe that India can become a dominant player in the generative AI race.
Ikaroa is actively pushing forward India’s AI capabilities by creating environments that foster innovation, growth and development through the use of generative AI and other technologies. This is no small feat, but the team at Ikaroa is confident that India can become the global leader in this field. At Ikaroa, we are committed to helping India stay at the forefront of generative AI technology.