We are on the path to becoming a $15-billion company: Fractal AI CEO Srikanth Velamakanni

Srikanth Velamakanni, group CEO of US-based artificial intelligence firm Fractal

TPG-backed Fractal AI, which was valued at $1 billion last year, is seeking to become a $15 billion by annual revenue company by serving the world’s 500 biggest companies, co-founder and Chief Executive Officer (CEO) Srikanth Velamakanni said.

In an interview with Moneycontrol, Velamakanni shed light on increasing investor interest in and growth prospects of artificial intelligence (AI) startups globally.

Founded in 2000 in Mumbai, the AI startup’s clientele includes Fortune 100 and 500 companies such as Google, Wells Fargo and Reckitt Benckiser. At the beginning of 2022, Fractal raised $360 million from private equity company TPG Capital Asia at a $1 billion valuation.

The startup is on a revenue run rate of Rs 2,000 crore for FY23.

In the interview on the sidelines of the Nasscom Technology and Leadership Forum (NTLF), Velamakanni said: “Eventually, our goal is to serve 500 of the largest companies on the planet and work with them. If they spend about $30 million with us annually, we can become a $15 billion company. We are not chasing valuation, but I think we have a path to becoming a $15 billion revenue company.”

He added: “The second thing I want to ensure is that Fractal is around for a long period of time as an institution. We have some very impressive big companies that got founded in India and have built the company in India. I want to follow those leads and create a company that lasts the test of time.”

The AI startup has also been talking about its plans for an initial public offering (IPO), but Velamakanni declined to give any new updates on it.

Innovations at work 

Fractal is currently working on several interesting innovations and new use cases of AI.

The startup is working on using quantum computing instead of traditional computing to increase the speed of AI manifold. This is being used for protein folding mechanisms at research labs for instance.

Fractal is also working on computational neuroscience and is researching how the human brain makes decisions and what it does right before arriving at one. And how AI can be used to assist people significantly to make the right decisions quickly.

Also Read | 21 years, a lot of struggle, profitability: How Fractal finally became a unicorn

Dronetech is another important area of development for the startup. By using AI technology and AI algorithms, it wants to make drone cameras not just to capture images but also think and process them like the human brain.

The startup is working with leadership coach Marshall Goldsmith and using generative AI to create use cases like a “virtual Marshall Goldsmith, talking and giving you coaching advice for free.”

“By looking at all his books, articles and videos, we are channelling Marshall Goldsmith in audio and video so that he can answer your questions in real-time, and he can replicate himself. So this is a really exciting project which is much more on the ground today,” Velamakanni explained.

Humans not using AI will be replaced 

In 2000, starting a company that was building AI solutions looked foolish, but things have changed significantly in 2023, Velamakanni said. According to him, the biggest change to happen recently that’s pushing AI into the mainstream is the evolution of computing. As the cost of computing is getting cheaper and more data sets are available, techniques too are getting better. This has led to AI being able to match or exceed human accuracy in a wide range of cognitive tasks.

Technologies like ChatGPT, Dall.E 2 and Stable Diffusion are pushing the boundaries of AI, Velamakanni said.

He said, “It's a very exciting time to be in AI. The other disruption this is causing is now AI is not going to replace human beings, but human beings who don't use AI will be replaced by human beings who use AI.”

Velamakanni cited the example of GitHub, an internet hosting service for software development, and how it is improving coding productivity and speed by 30-40 percent. He expects a similar trend in AI.