India Approves $1.2B for Artificial Intelligence Ecosystem, Anticipating Trillion-Dollar Boost to GDP

The Indian government has given its approval to the India Artificial Intelligence (AI) Mission, which will receive a budget of Rs 10,372 crore ($1.2B) over the course of five years. This initiative aims to promote the growth of AI technology and enhance the country's capabilities in the field of supercomputing.


The IndiaAI Mission aims to provide access to 10,000 graphics processing units (GPUs) to meet the increasing demand for GPU-based servers. GPUs have higher processing speeds compared to CPU-based servers and are crucial for developing AI applications and models.

The mission is a public-private partnership model that offers GPUs as a digital public infrastructure for AI-as-a-service and funding opportunities for AI startups. The approved GPUs will be available within the next 18-24 months.

India’s mission aims to bridge the investment gap in generative startups, as the country has seen significantly lower investments compared to the US. The scarcity and high costs of infrastructure have hindered the growth of AI startups.

By investing in 10,000 GPUs, India aims to become the AI application capital by empowering startups to create their own foundational models. This move reduces dependency on external models and allows for a variety of AI applications.

The focus of the mission is to develop the entire AI ecosystem, including compute power, models, applications, talent, data platforms, and regulatory frameworks, as highlighted by Ashwini Vaishnaw, the Minister of Information Technology.

Rackspace Technology, a global cloud computing company, is interested in establishing a data center in India due to the increasing adoption of AI by local firms. The forecast for India’s AI landscape is promising, with the country ranked as the global leader in AI skill penetration.

According to Stanford AI Index 2023, India has the potential to add $359-438 billion to its GDP through GenAI adoption. The market for AI in India is expected to grow at a compound annual growth rate of 25% until 2027, driven by investments, talent pool expansion, and upskilling initiatives.

Statsita predicts that investment in AI technology will reach nearly a trillion dollars by 2024. Companies are increasingly adopting AI to automate tasks, such as Truecaller’s AI-powered call recording feature.

During his visit to India, Microsoft CEO Satya Nadella emphasized the country’s potential in realizing the promise of AI, highlighting India’s growing developer community and its momentum in the field of technology.

This is a crucial moment to explore the convergence of advanced algorithms, data analytics, and computational power to unlock new frontiers in AI beyond automation and cost reduction.

India is developing and deploying AI solutions to address various developmental challenges, including accessibility to digital services in non-English languages, agricultural chatbots catering to regional diversity, and AI-driven solutions for traffic and city infrastructure monitoring.

Tarah Nguyen