Moneycontrol Pro Panorama | Making AI count

AI could change industries and the confidence of investors in industries.

Dear Reader, 

Australian abattoirs have adopted artificial intelligence (AI) to count sheep for more accuracy and for freeing farmers to do more meaningful jobs (like increase their produce), according to a Financial Times February 13 article. While this shows a productive usage of AI as a worthy assistant, freeing the human to do better jobs, we have not stopped here. We want AI to do great things so that humans (us) can do even greater things.

Almost every industry has some form of AI working for them. In India, at the AI Summit this week, a whole tapestry of AI heft was on display with the formidable combination of large language models (LLM) and robotics. Catch our full coverage of the AI Summit here.

What was also on display was the deep pockets willing to invest in geographies and areas that show the promise of exponential progress and therefore, exponential returns. Microsoft is on track to spend $50 billion across the Global South, Nvidia is gearing up to partner for AI factories and money is being thrown at every possible AI activity – from GPU clouds to developing LLMs.

The things that power AI, which is the hardware part, are also critical. Pax Silica is a US-led collaboration that aims to team up with countries towards a shared common goal of driving AI-powered prosperity of members. It would mean easier cooperation on critical minerals, AI models and security goals. India’s entry into this group would give the country an edge in supply chains essential to AI and advanced computing.

While leaders are busy shaking hands to get the most out of an imagined AI-driven future, the road towards it isn’t all smooth. In fact, it would be bumpier than we fear. The effect of AI on jobs has already triggered hot takes and deep conversations across the public and policymakers. More than jobs, AI could change industries and the confidence of investors in industries. One such change was visible this month for the IT sector. Anthropic’s new AI model that threatens to snatch work from the IT industry has left investors questioning the valuations of companies. We wrote about the faulty narratives around AI leading to problems for IT companies in our Wednesday Panorama and how the IT sector is in some ways critical for AI development.

But what the episode highlights is that an imagined future of AI-driven prosperity won’t be easily arrived at. We will perhaps have to reckon with several mangled models, financial accidents, painful metamorphosis of various industries and a volatile current of funding flow in our pursuit. Sprinkle this with enough conversations around existential threats from AI and the fear of annihilation wraps around us snugly.

What can countries do to avoid the pitfalls of greed and fear in AI? What can humans do? The key is to anticipate and bridge gaps that when ignored can turn into serious fault lines.

There is the divide between advanced economies and emerging market economies when it comes to increase in productivity through AI adoption, a warning from Bank for International Settlements (BIS). Manas Chakravarty details here that emerging economies could lose out on productivity gains, given that the economy is tilted more towards farming and sectors that have low AI exposure.

Chakravarty writes that India must pour significant resources into digital public goods, education reforms and governance to avoid a divide between its urban elite and rural and informal masses on AI skills and resources. The same is true for every EM country.

Then, there is the change that is coming for almost every sector with AI adoption. Here fiscal support through regulations or investment would be critical and would determine if AI gains are offset by brain drain and whether a country gets to write the rules for AI adoption.

Yet another sticky wicket is money. An FT piece, free to read for Moneycontrol Pro subscribers, details how price wars have already begun in AI.

Finally, here is an early glimpse of existential terror that Prosenjit Datta flagged in his piece here on AI bosses hiring humans. Will AI team up and conspire against humans using their own social media or will they enslave us? The end isn’t near, but if you are losing sleep over this, remember that counting sheep to doze off is still available. But AI is counting sheep, too.

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Aparna Iyer Moneycontrol Pro