AI revolution: This giant firm forecasts Indian market will attract $5 Billion investment by...

Among the surveyed markets, including Australia, Indonesia, Japan, South Korea, Malaysia, Singapore, and Taiwan, India emerges as the frontrunner in AI expenditure.

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Top Indian News Desk
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A recent study by Intel and International Data Corporation (IDC) sheds light on the escalating investment in artificial intelligence (AI) within India. Projections indicate a major surge, with spending anticipated to soar to $5.1 billion by 2027, exhibiting a robust compound annual growth rate of 31.5% from 2023 onwards.

Among the surveyed markets, including Australia, Indonesia, Japan, South Korea, Malaysia, Singapore, and Taiwan, India emerges as the frontrunner in AI expenditure. The AI software sector is poised to spearhead this growth trajectory, foreseeably reaching $2.6 billion by 2027.

Where do the investments flow?

In 2023, India witnessed AI investments totaling $1,703.8 million, with key sectors like banking, financial services and insurance, manufacturing, healthcare, telecommunications, and retail leading the charge. These sectors exemplify a strategic focus on leveraging AI for enhanced operational efficiency and innovation.

AI penetration

Sharath Srinivasamurthy, associate vice-president at IDC, predicts a substantial uptick in AI adoption, projecting a landscape where AI permeates all facets of the industry by 2027-2028. However, he cautions against the potential brain drain of AI talent from India, emphasizing the global demand for skilled professionals in this domain.

Building AI infrastructure

With AI infrastructure spending estimated to reach $733 million by 2027, India is steadfastly fortifying its technological ecosystem. This investment underscores the nation's commitment to bolstering AI capabilities, with a particular emphasis on infrastructure provisioning.

Intel, recognizing the burgeoning competition in the AI infrastructure space, remains resilient in its pursuit. The company's recent launch of the Gaudi 3 series of chips underscores its commitment to innovation and competitiveness in the AI computing market. Responding to queries on GPU infrastructure, Intel asserts its capability to fulfill orders expediently, positioning itself as a formidable contender in the AI hardware arena.

Challenges to harness India's potential

Despite India's status as a big producer of global data, there exists a stark disparity in computing capabilities. Santhosh Viswanathan, Vice President and Managing Director at Intel, highlights the urgency of bridging this gap, emphasizing India's immense potential as a data-driven economy.

While the hype surrounding generative AI (GenAI) is palpable, the study reveals a pragmatic allocation of AI budgets. With the majority directed towards predictive and interpretative AI, the focus remains on practical applications.