As the generative AI (Gen AI) wave is quickly gaining steam globally, India too is estimated to see an addition of a cumulative $1.2-1.5 trillion to its Gross Domestic Product (GDP) over the next seven years, according to a report by EY India released on December 17.
The report titled ‘The AIdea of India: Generative AI’s potential to accelerate India’s digital transformation’ forecasted that by fully capitalizing Gen AI technology and its applications across sectors, India can potentially add $ 359-438 billion in FY2029-30 alone, reflecting a 5.9 - 7.2% increase over and above baseline GDP.
About 69 percent of this will be driven by enterprise adoption by sectors such as business services (including IT, legal, consulting, outsourcing, rental of machinery and equipment, and others), financial services, education, retail, and healthcare, the report said. The expected impact will come from improvements in employee productivity, better operational efficiency, and personalized customer engagement.
This comes at a time when technology giants like Google, Microsoft, Amazon and IBM are leaving no stone unturned to build the most advanced enterprise-grade generative AI solutions and tools. Earlier this month Google launched its largest and most capable AI model Gemini, aimed at taking over OpenAI's GPT-4 and Meta's Llama 2.
With all of these developments coming together coupled with data centre players and chip makers like Intel and NVIDIA entering the fray, building AI capabilities on chipsets, an aggressive push for enterprise adoption will be the natural outcome.
Building Gen AI strategy
Of the 200 C-suite participants surveyed for this report, around 75 percent of them said that having a Gen AI strategy is now essential for organisations, with customer engagement being the most crucial aspect.
Interestingly, 73 percent of organizations will be looking for external tech providers for their implementation.
The report further highlighted, “Nearly 60% of organizations acknowledge the significant influence of Gen AI on their businesses. However, 75% of them express a low to moderate level of readiness to harness the benefits of Gen AI.”
“The two primary challenges faced by organizations currently are skills gap (52%) and the availability of unclear use cases (47%), while only 36% of organisations see data privacy as the risk of Gen AI,” it added.
Also read: Google’s ‘multimodal’ AI model Gemini: What it means for enterprises?
Mahesh Makhija, Technology Consulting Leader, EY India, said, “Organizations are swiftly adopting to AI-first approach to digital transformation, aiming to enhance customer engagement, increase productivity and achieve greater agility in delivering digital capabilities using innovative foundation models and AI-first solutions.”
“Although in early stages, there is a tremendous sense of optimism in AI and to realize its full potential, India must significantly elevate its efforts in terms of increased government role in development and deployment,” he added.
Public sector adoption
The report deemed Gen AI as a catalyst for economic growth as Governments worldwide are actively pursuing measures to promote and regulate AI. Implementing measures like enabling access to training data and marketplaces, deployment of Gen AI systems as Public Goods, securing critical digital infrastructure (through the roll-out of 5G, data centers, access to specialized chips and AI-specific compute infrastructure), and access to talent and public funding of R&D will help foster Gen AI innovation, it said.
In terms of adoption, the public sector will likely use Gen AI systems for the public good, which will be in line with the National Strategy for Artificial Intelligence (2018), which emphasizes an inclusive “AI for ALL” impacting across sectors, including education, healthcare, agriculture and smart cities, to name a few.
EY experts said, getting access to data and marketplaces, securing digital infrastructure, and facilitating talent access and public funding for R&D can enhance Gen AI innovation in India.
Taking a cue from the UAE and EU, India could also look at developing an open-source ecosystem for basic algorithms and training datasets to help Indian entities and start-ups develop their own Gen AI products and fast-track indigenous innovation.
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