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India AI-ready, has massive growth potential in talent; to invest $5 billion by 2027: IDC+Intel study

In a recent study conducted jointly by Intel and the International Data Corporation (IDC), it’s not just projected, but anticipated with certainty that spending on artificial intelligence (AI) in India will experience a significant surge. With a compound annual growth rate of 31.5 percent expected from 2023, AI expenditure is set to hit an impressive $5.1 billion by 2027, marking a significant milestone in India’s technological journey.

India stands out with the fastest-growing AI spending rate among the eight markets analyzed, including Australia, Indonesia, Japan, South Korea, Malaysia, Singapore, and Taiwan. The study highlights the AI software sector as the primary contributor to this growth.

The report also reveals that in 2023, Indian businesses collectively invested $1,703.8 million in AI. Sectors such as banking, financial services and insurance, manufacturing, healthcare, telecommunications, and retail led the charge in AI spending during this period.

Sharath Srinivasamurthy, associate vice president at IDC, notes that 2023 was predominantly a year of planning, with a significant focus on AI infrastructure provisioning and related software, amounting to a substantial expenditure of USD 209 million. He anticipates a more widespread adoption of AI going forward, expecting it to become pervasive across various sectors by around 2027–2028.

Following the trend, augmented customer service agents accounted for a significant USD 168.8 million spend, followed by digital assistance at USD 113.1 million, augmented threat intelligence at USD 100.1 million, and program advisor recommendation systems at USD 97.1 million.

In addition to highlighting the expenditure patterns, concerns were raised about the potential brain drain of AI talent from India. With half of the global spending on AI originating from the US, there’s a substantial demand for AI expertise worldwide, posing a risk of talent migration away from India.

The report also forecasts a substantial investment in AI infrastructure, with spending expected to reach $733 million by 2027. This significant allocation underscores India’s efforts to bolster its AI capabilities, with a particular focus on infrastructure provisioning.

Intel, a key player in the AI infrastructure space, is not just facing competition but actively leading the way. In response, Intel recently launched the Gaudi 3 series of chips globally, targeting the burgeoning AI computing market. When questioned about GPU infrastructure and order fulfillment timelines compared to NVIDIA, Santhosh Viswanathan, vice-president and managing director for the India region at Intel, confidently assured that Intel could fulfill GPU orders much sooner than its competitors.

Viswanathan expressed his enthusiasm for India’s potential in AI, emphasizing its dedication to shaping the technological landscape. He described India as an “amazing India,” reflecting the vast opportunities AI offers the country.

With an abundant talent pool, a culture of innovative thinking, and access to extensive data, India is not just poised, but primed to lead the global AI revolution. Viswanathan highlighted India’s proactive approach and unwavering commitment to AI, which is driving significant growth and positioning the country as a leader in shaping the future of technology.

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