Although Sitharaman didn’t pay attention to the Artificial Intelligence (AI) industry in her Interim Budget speech in February, her address next week is  widely expected to bring AI into sharp focus, along with ‘Deeptech’ – robotics, blockchain, biotech – and machine learning.

A key and likely announcement is the doubling of the Government’s allocation in March of over Rs 10,372 crore to the ‘AI Mission’, an amount likely to be increased to Rs 20,000 crore. 

Just a few months ago, former Minister of State for Electronics and IT Rajeev Chandrasekhar said: “The Prime Minister has already approved Rs 1 lakh crore as the seed fund, which will be invested in research and development to fuel innovation in India’s AI mission, with a total outlay of Rs 20,000 crore.”

Nearly half of the Rs 10,372-crore funding announced in March to accelerate AI adoption was to be utilised to enhance India’s computing capacity, and it was this intent that saw the Government announce plans to acquire 10,000 graphic processor units (GPUs), a crucial component to run AI solutions. The tech community, however, remains cautiously optimistic.

“Traditional methods won’t suffice; we need a dedicated task force and adequate budget allocation for swift implementation,” Pratap Daruka, Chief Financial Officer at Tredence, was quotes as saying in an interview to YourStory. 

Daruka underlined the gaping shortfall in India’s share of global AI investments, only 2.5 per cent, proposing that the Budget involve R&D grants and tax credits to encourage companies to innovate, leveraging AI to create millions of jobs and redefine existing roles.

Herein lies the grist in the tale, since the purchase of 10,000 GPUs by ‘a Government’ is woefully conservative at best, especially when compared to the computing capacity of ‘even Big-Tech firms’ in Silicon Valley. To remain globally competitive, it is imperative that India pumps in adequate resources to expand the nation’s computing capabilities.

Beyond Mere Financial Commitments

The tech industry also expects the Government’s undivided support for AI-driven innovation by encouraging funding collaborations between the public and private sectors in AI, blockchain, quantum computing, cybersecurity and privacy technology.

AI is a big priority for the Ministry of Electronics and Information Technology (MeitY), which  announced on July 17 that its Startup Hub is partnering with Google to upskill 10,000 homegrown startups (in AI).

As the Government pushes its new-found mottos of ‘Make AI for India’ and ‘Make AI Work for India’, it must also recognise the relatively low expenditure on R&D – currently just 0.64 per cent of the GDP, noticeably lower than the investments being made by other nations.

Consultancy firms like Deloitte have also decried the gaps in India’s spending on AI, charting out big expectations from the Budget. “While (India’s) research publications and patents have improved, it is way behind in terms of innovation, citation index and global exposure.”

“The Government should boost investments in AI or encourage private investments via tax cuts and identify new research areas, such as quantum computing in AI, digital nudge for social good using AI, Explainable AI (XAI), Gen Chem and Computational Biology, and Smart and Connected Cities,” Deloitte added.

Such expectations put the Government in a Catch-22, especially when India is facing an unemployment crisis, more so as the very uncomfortable question of “Will AI take away our jobs?” can become potentially unanswerable. A fine line will have to be walked to douse concerns over possible job displacement. Thus, while corporations will have to be enthused to adopt AI, the potential of impact on jobs will have to be minimized and smoothed over.

Just a few days ago, the Swadeshi Jagran Manch – affiliated to the Rashtriya Swayamsewak Sangh (RSS) – called for a ‘Robot Tax’ to support employees displaced by AI, highlighting the social implications of tech advancements and high unemployment, The Secretariat looked into the pros and cons of the issue.

AI Is Overhyped, Claim Some 

AI is projected to become a Rs 2,32,552-crore industry in India by Year 2030. Does that mean this is something we should be worried about, or is it just another bubble, one that will dissipate with a whimper, in much the manner that the dot.com and crypto bubbles went after all the hype and the hoopla?

Over the last few months, there has been global skepticism around the monetization of AI investments, as seen in analyses by Goldman Sachs and Sequoia Capital. The burning issue is that billions of dollars are being spent on developing and adopting AI by much of the world, but the returns on these investments are being enjoyed only by some ‘Big Tech’ firms such as Nvidia, Microsoft and OpenAI, etc., or will be realized universally only after quite a while.

“AI technology is exceptionally expensive, and to justify those costs, the technology must be able to solve complex problems, which it isn’t designed to do,” said Jim Covello of Goldman Sachs in a report titled ‘Gen AI: Too Much Spend, Too Little Benefit?’.

In turn, Sequoia Capital’s David Cahn wrote that there is a delusion that has spread from Silicon Valley to the rest of the world that companies investing heavily in AI will become wealthy quickly as Artificial General Intelligence (AGI) – a human-level intellect in a software program – is imminent and that GPUs are the only valuable resource.

Cahn added a caveat, though: “In reality, the road ahead is going to be a long one. It will have ups and downs. But almost certainly, it will be worthwhile.”

Inadvertently, Goldman Sachs’ and Sequoia Capital’s premise hurls the Catch-22 the Indian government finds itself onto a very crooked pitch. A savvy part of the country waits for concerted announcements that will propel India’s AI ambitions into the next orbit. 

But for the government, turning promises into progress and meaningful tech advancements is easier said than done, especially with coalition partners pulling at its coat-tails.