Netweb Technologies, a domestic server and high-end computer maker, is in talks with the government to set up an AI sovereign cloud by providing Nvidia, AMD and Intel GPU-powered systems to startups under the AI Mission.
The Faridabad-based company, which tied up the American chip giant Nvidia in November, is looking to cash in on the artificial intelligence (AI) boom and India’s push to emerge as the hub of the new tech frontier.
“The government's idea is to create a sovereign cloud, so startups don’t struggle in getting access to these AI compute resources. They would pay a normal small maintenance fee to use it. We are part of the discussions and we are trying to help the government on this front,” Netweb CMD Sanjay Lodha told Moneycontrol.
India is looking to build an AI sovereign cloud on the lines of similar initiatives by countries such as Singapore, Saudi Arabia, Japan and Poland. For it, the government is seeking inputs from companies like Netweb Technologies, as AI building infrastructure is expensive and a specialised job, made harder by a shortage of graphics processing units (GPUs).
Setting up AI infrastructure is now a strategic priority. Countries are investing billions of dollars to secure computing capacity for their companies and national security requirements.
Under the AI Mission, the government is considering a deal with Nvidia to procure GPUs to set up AI infrastructure to cater to startups, researchers, academic institutions and other users through vouchers or cross-subsidies.
Govt eyeing vouchers, subsidies to make AI GPUs affordable for educational institutions, innovators
“Startups today want to buy this costly infrastructure but it is very difficult for them to do it, hence India is trying to help them,” Lodha said.
GPUs are essential for running super-computing tasks involving AI and large language models (LLMs) on which generative AI is built.
These units are expensive, especially for educational institutions, which may have to buy dozens of them.
In the open market, one GPU unit for AI computing costs anywhere between $30,000 and $40,000 (Rs 25 lakh to Rs 30 lakh at the current exchange rate).
The company expects the AI Mission and a manufacturing partnership with GPU maker NVIDIA to drive its AI systems business in the current fiscal.
High-performance computing (HPC), private cloud and hyperconverged infrastructure (HCI) and AI systems are the top three revenue-generating streams for Netweb Technologies.
In FY24, HPC and HCI contributed 70 percent —35 percent each —to the company’s revenue. AI systems are growing fast and are 11 percent of the overall business.
Income from AI systems grew 2.6 times year-on-year in the March quarter of the fiscal gone by.
“By the end of this year, our AI systems business will be 15-16 percent,” Lodha said. The widespread adoption of GenAI offered promising opportunities, he said.
Nvidia partnership
Netweb is to begin manufacturing Nvidia GH200 super chip-enabled systems, known as Grace Hopper, after the two sides joined hands in late November. The systems would be made primarily for domestic requirements, including for the AI mission.
“We have worked on prototypes and primary sampling is done and we will come out of commercial production by the end of this quarter.
“We get the chips from TSMC and design the complete architecture and then manufacture the systems completely. At this time, only a few companies in the world are trying to do it,” Lodha said, referring to Taiwan Semiconductor Manufacturing Company.
Expansion and Exports
The company, which has approvals for IT hardware and telecom equipment production-linked schemes, has also brought forward the plan for a new facility in Faridabad.
“At the time of our IPO last year, we had promised to start Surface Mount Technology (SMT) manufacturing in 2025. But seeing the traction, we have preponed the launch,” he said. The unit, in which the company has invested Rs 30 crore, is 10 km from its Faridabad facility and is expected to begin operations this month.
The company is also looking to start exports of its high-end servers to markets in Europe. “The high-end computing products will be for developed markets, while telecom products we could sell to underdeveloped markets,” he said.
The company has also developed and designed networking switches for data centres, which, it said, would drive growth this fiscal. It is also working with 5G-based OpenRAN equipment.
An Open Radio Access Network disaggregates hardware and software components of the radio access network, allowing telecom operators to mix and match components from different vendors, promoting interoperability and innovation.
In the March quarter, Netweb Technologies posted a nearly three-fold jump in its net profit at Rs 29.6 crore, on account of a boom in demand for AI-based solutions. Revenue more than doubled to Rs 265.88 crore.
At 10.13 am, the stock was trading at Rs 1,945.25 on the National Stock Exchange, up 5 percent from the previous close.
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