Even Bill Gates in the past has publicly acknowledged the impact of Indian software engineers working at Microsoft. ‘’We hired very smart IT graduates and brought them to Seattle,” he said.

Fast forward to today, Jensen Huang, the founder and CEO of the world’s second biggest company in terms of market capitalisation — Nvidia — has said that India’s focus should now be on exporting artificial intelligence (AI) to the world. By AI exports, he meant India’s ability to develop, create and sell AI technologies, solutions and services to other nations or markets.

"I believe, in the long term, India will manufacture and export AI. That’s when India will become a massive business opportunity for us," said Huang, sporting his signature leather jacket at Nvidia’s AI Summit in Mumbai last week.

"India wants to make money even when India is sleeping. If you are exporting labour, you are not making money when you are sleeping. But if you export intelligence, you can make money even while sleeping,” he added.

Software and algorithms don’t sleep, nor do they need continuous human intervention. So, this shift would enable earnings round-the-clock.

AI, especially in the last couple of years, has become a burgeoning market. The global AI market is expected to be US$ 300 billion by end-2024, double of what it was four years ago. 

Currently, AI software makes up 80 per cent of the industry’s revenue, but in the next five years, growth in AI hardware — especially AI chips — will grow the fastest.

Expanding India's Compute Capacity

India is still a nascent player in the AI industry. While the Indian government is betting big on manufacturing semiconductors, none of the chips currently being manufactured in India are for AI. 

Yes, AI chips are also sometimes referred to as semiconductors, but the key difference between AI semiconductors and regular semiconductors lies in their design and computing power.

Computing power, which is primarily derived from GPUs, is essential for developing and training AI systems. Currently, this technology comes at a high cost, and Nvidia dominates the market for GPUs used in AI-focused data centres. 

However, recent deal announcements between Nvidia and major Indian IT companies indicate that some of this compute capacity will be established here.

By the end of this year, these companies are poised to amplify Nvidia Graphics Processing Unit (GPU) deployment in the country by an astonishing tenfold, compared to what it was just 18 months ago.

Tens of thousands of NVIDIA Hopper GPUs — designed for advanced computing tasks — will soon grace India’s data centres, transforming them into AI factories.

This will also allow smaller firms in the country to access advanced resources that have till now been out of their reach. Smaller companies often face challenges due to the high costs of accessing cloud resources abroad or importing specialised hardware. 

By establishing compute capacity in India, the barriers to this access will be lowered, democratising access to AI and high-performance computing (HPC).

This also aligns with the ‘Make in India’ slogan, which encourages big and small companies to develop, create and grow products and services for India and the world.

By manufacturing AI hardware domestically, not only can India cut down on the costs of importing expensive components, but also retain control over its data and intelligence pipelines. 

That is one of the reasons why Nvidia and the Indian government are in talks to develop AI chips in India. 

“It makes complete sense that India should manufacture its own AI,” Huang said. “You should not export data to import intelligence.”

The chip proposal was reportedly presented by Huang during a meeting with Prime Minister Narendra Modi in the US earlier this year, as confirmed by Union IT Minister Ashwini Vaishnaw: “Yes, we are discussing with Nvidia the development of an AI chip; discussions are at a preliminary stage.”

This comes at a time when India is spending a significant amount — to the tune of Rs 4,564 crore — set aside for its AI Mission, to enhance computing capacity, offering it at discounted rates for start-ups and researchers. A tender has been issued for GPU procurement, and discussions are currently ongoing.

This initiative will be implemented through a public-private partnership model, with 50 per cent gap funding. If computing costs decrease, the private partner will be expected to increase compute capacity within the original budget to meet the rising demand.

With AI reshaping industries worldwide, India stands at a crossroads. Will the country see a shift from exporting labour to exporting intelligence, as Huang prediced? As partnerships with Nvidia, key private players and ambitious government initiatives take shape, India has a unique opportunity to become not just a consumer of advanced technologies, but a global hub for AI development.

Will India sieze this moment?