At a meeting called by the IT ministry on the IndiaAI mission, industry stakeholders proposed the constitution of a ranking/certification system for artificial intelligence startups to give more credibility to such startups which would ease access to funding, three sources aware of the matter said.
The possibility of government directly procuring from such startups was also discussed.
The meeting on August 27, was chaired by minister of state for electronics and information technology Jitin Prasada, secretary S Krishnan and additional secretary Abhishek Singh. Telangana's IT and industries special chief secretary Jayesh Ranjan was also present in the meeting. Around 20 industry stakeholders attended the meeting.
"There is a sense that there are lots of startups which call themselves "AI startups", but they do not essentially provide any AI solutions," a source aware of the developments said on condition of anonymity.
The industry proposed that there be some benchmark on which the government can check different AI companies and figure out who is doing how well. "They can assign them a score. And that score can be used by the industry, by the investors, to be able to put in money where it's needed," the source added.
"The mood of the industry stakeholders was not to spread resources too thin by giving for example $1,000 to 100,000 startups. Rather, to give a good amount of money to 10, 15 handpicked companies so that they lead the charge, become unicorns and decacorns for the world," said a second source close to the developments.
There was a consensus during the meeting that startups try to survive on grants, because revenues are not very high. "There are companies which multiple grants. Obviously people would want better companies who are surviving not on grants, but on revenue and investment. But for investment to come in, investors need to know they're investing in the right company. So the ranking by IndiaAI would become very important," the second source added.
Attendees also discussed Telangana's system of directly procuring from AI startups, and explored whether the Central government can implement something similar.
"One of the consensus during the meeting was that the government can be a good customer in a lot of AI use cases. Because the government has demand and startups need consistent business," said a third source aware of the developments.
In Telangana, for AI startups which are incubated in the government-run startup incubator T-Hub, the government removes the entire procurement process and directly takes the solution. The incubation period for these startups serve as a kind of due diligence for startups' technological solutions, a source said.
"So I think IndiaAI too can do that. They have a lot of problem statements. They have a lot of data. They have all the startups registered with MeitY. They can interact with them," the second source added.
Recently, the MeitY invited applications from to procure 1,000 GPUs to provide access to artificial intelligence (AI) services over cloud to academia, MSMEs, startups, governments, and other public sector agencies, under the IndiaAI Mission.
In March 2024, the Government of India approved the Rs 10,732 crore IndiaAI Mission with the aim of creating computing infrastructure for the country, AI centres for multi-modal LLMs, procuring 10,000 graphics processing units, and more.
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