What the AI opportunity means for India

India stands at the precipice of a technological revolution, and artificial intelligence (AI) is set to be a significant driving force. As the world looks toward the future, India is uniquely positioned to harness AI's potential, both as a hub of talent and as a burgeoning market.

"If you go back to the history of the IT industry in India, it has always been known for its talent and as a significant market for consumer technology,” says Puneet Gupta, VP & MD of NetApp India/SAARC. This legacy is set to continue on the AI front. "The talent pool India has is going to serve the whole world in building AI use cases, models, and all the associated developments. Global companies will collaborate with experts in India, which is already becoming a critical part of the India services story."

As per findings from NetApp’s 2024 Cloud Complexity Report, 70% of Indian companies have AI projects underway, exceeding the global average of 49%, with a remarkable 91% of Indian organisations planning to utilise over half of their data for AI model training in 2024, signifying data-driven AI advancement.

Gupta further highlights the demographic advantage the nation possesses while calling the consumption market 'huge'. With a young population and an ever-increasing number of internet users, the data generated is immense. India, with 692 million internet users, stands as the second-largest market in the world.

"India's going to be on fire with AI. We have the skills, technology, data sets, and demographics. There is nothing that can stop us," he adds.

This optimistic outlook is bolstered by recent policy initiatives and programmes, such as those discussed at the G7 summit, which recognise India’s potential in the tech world.

The potential market for AI in India is vast. A recent report by Nasscom estimates that India's AI market, growing at a CAGR of 25-35%, is projected to reach around $17 billion by 2027, driven by sectors such as healthcare, agriculture, education, and finance. The government's push for digital transformation, exemplified by initiatives like Digital India and the National AI Strategy, aims to position the country as a global AI leader.

However, the journey towards realising AI's full potential is not without challenges. The path to near-perfect AI models is often riddled with biases. "Talking about biases and responsible AI is very pertinent. It's very easy to deduce a bias, as seen in election predictions. If the information isn't secured properly, malicious users could exploit biases in data sets, leading to wrong inferences,” says Shuja Mirza, director of Solutions Engineering at NetApp India, emphasising the importance of responsible AI.

He stresses the need for robust infrastructure and governance to prevent such issues. "As part of responsible AI, the infrastructure must be secured, with strict governance. You cannot just leave data lying around, hoping to extract information safely. If someone breaches that dataset, biased usage can lead to wrong consequences."

Measuring the return on investment (ROI) of AI initiatives is another complex issue. “It’s a very tough one for CIOs. They are under pressure from boardrooms to achieve certain business outcomes with AI projects,” says Mirza. Often, AI teams operate separately from the main IT departments, led by data scientists. "It's still challenging to definitively say we've got the returns from our AI projects. There are grey lines between analytics and AI, with many results coming from analytics that might not necessarily be classified as AI ROI," he adds.

Despite these hurdles, the trajectory for AI in India is overwhelmingly positive. The country's strengths in IT, a robust talent pool, and a rapidly growing digital infrastructure create a fertile ground for AI innovation and application. "All the ingredients are right there; it’s just about how much we can innovate and define use cases," says Gupta.

NetApp's global revenue stands at nearly $6.5 billion. Currently, India ranks fourth in Asia and contributes 20% to the company's overall revenue. However, within the next five years, India is poised to become the US-headquartered entity’s largest market in Asia.