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One quick thing: India to launch AI Mission to help startups with compute power, says PM Modi

• He also called for countries to work together on a global AI framework 

In today’s newsletter: 

• Omidyar Networks to wind up India ops
• Edtechs ditch screens, look to build campuses
• RBI's cloud centre move rattles fintechs, banks

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The Indian venture capital scene just witnessed a tremor, with Omidyar Network saying "hasta la vista" to the country.

Omidyar Network, an impact investor, has slammed the brakes on its Indian operation and will no longer make new investments in the country.

• In India, Omidyar has invested around $500 million and has already clocked exits worth $250 million in about 13 years

Omidyar Network, backed by eBay founder Pierre Omidyar and Pam Omidyar, has clarified that it will honour all deals it previously committed to.

• The US-based VC firm, known for its dual-chequebook model, has previously backed companies like Indifi, M2P, DealShare, Bounce, and ZestMoney

The move has undoubtedly piqued the curiosity of the VC ecosystem about the implications of global VCs setting up shop in India. 

• This development resonates with Sequoia Capital's announcement on June 6, 2023, of splitting its operations into three independent entities: US and Europe, China, and India and Southeast Asia (SEA)

So, what prompted this abrupt decision to shut shop? According to reports, the Central Bureau of Investigation (CBI) has implicated ten non-government organisations (NGOs), including Omidyar, a US-based organisation, in a case of allegedly facilitating the illegal registration and renewal of Foreign Contribution (Regulation) Act (FCRA) licences. 

Find out more

Indian edtech is caught in a loop!

• From largely offline in 2019, it pivoted to a near-completely online model during the pandemic's peak in 2022

Now, in 2023, upskilling and higher edtech segments are mirroring their K-12 counterparts, shifting back to offline learning in the post-pandemic world.

Highly-valued upskilling and higher edtech companies, including Scaler and PhysicsWallah, have started offering undergraduate and postgraduate courses. 

• These "new-age" colleges operate through entirely offline, residential campuses and provide longer-duration courses ranging from six months to four years

Masters' Union, founded in 2020, pioneered the concept of a modern college in the Indian education landscape, with other players following suit later in 2023.

This comes at a time when a funding winter has reduced the investment flow to the vertical, compelling companies to venture into more profitable models.

• With higher revenue generated per user and lower customer acquisition costs in some cases, founders believe this model could help them achieve profitability.

As an added advantage, these modern colleges operate in partnership with incumbent universities or on leased premises, thereby reducing capital expenditure.

Startups are boldly venturing into the arena traditionally dominated by legacy institutions like the IITs and IIMs. 

• They're confident their "modern colleges," with technology woven into the curriculum, offer a distinct advantage

However, on the surface, these new players don't appear radically different from their traditional counterparts. 

Dig deeper

The Reserve Bank of India (RBI) has kicked up a bit of dust by announcing it'll be hosting domestic financial data in its own data centre, run by Indian Financial Technology & Allied Services (IFTAS). 

• The move has sent ripples of confusion and concern across the fintech and banking landscape

And that is what is missing! 

The RBI has provided no clear reason for the move or any other details. Any regulatory missive can be unnerving for banks and fintechs, especially when it comes from the RBI, as it means serious business.

IFTAS, a cloud centre, maintains the payment settlements done by the central bank's payment settlement systems NEFT and RTGS, among others.

• It also provides crucial banking software and cloud storage to smaller banks across the country

Some bankers are concerned that IFTAS may struggle to manage the service levels that large banks expect. 

• A few are also worried about whether the firm can deliver the cutting-edge AI and analytics that large banks desire

The RBI is probably looking at setting up a domestic data centre, managed by Indian banks, to house KYC, compliance, high-value suspicious transactions, and reporting data.

Alternatively, the central bank could be looking to create an NPCI-like agency for all banking-related products, services, and infrastructure

Dig deeper

• The Biden administration is in talks with Nvidia on permissible AI chip sales to China, but insists on keeping its most powerful ones off the table.
  
  
• Sports Illustrated CEO Ross Levinsohn has been fired after a Futurism exposé revealed how the publication had been publishing articles from fake writers. 5-Hour Energy founder Manoj Bhargava is taking over as interim CEO.
  
  
• Over 100 Silicon Valley CEOs in a private WhatsApp group were shocked and confused by Sam Altman's sudden ouster from OpenAI, flooding the chat with questions after news of his firing broke.

The man, the myth, the legend, Thalaiva Rajinikanth, turns 73 today! 

His mere presence on screen sends shivers down spines and box office records tumbling. Remember those electrifying dialogues that crackle with energy? The gravity-defying stunts that make superheroes weep?

From the early days of Bhuvana Oru Kelvi Kuri to the iconic Mullum Malarum, Rajinikanth has painted the silver screen with his magic.

He's Thalaiva, the leader, the undisputed king of Indian cinema. Happy birthday, Thalaiva! 

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