We are open to partnering with Indian companies for semiconductor R&D: IBM’s Sandip Patel

Sandip Patel, Managing Director, India and South Asia, IBM

IBM calls its decades of expertise in semiconductor research & development (R&D) the best in the market. Last year, the company had signed a memorandum of understanding (MoU) with the Indian government to support the India Semiconductor Mission.

Earlier this month, the technology giant announced its first partnership in this space in India with the L&T Group. IBM will be providing L&T Semiconductor Technologies with R&D support to design advanced processors for edge devices, hybrid cloud systems, and other areas like mobility, industrial, energy, and servers.

Now, IBM is opening its doors to other Indian chip design and manufacturing companies for partnerships.

Overall, in India, the company believes that growth will come from its focus on hybrid cloud and artificial intelligence (AI) offerings. According to a recent survey by IBM, nearly 59 percent of Indian companies are deploying AI, the highest adoption rate across all markets.

In an interview with Moneycontrol on the sidelines of its flagship event, IBM Think in Mumbai on September 24, Sandip Patel, Managing Director, IBM India and South Asia, shares the company’s AI, semiconductor plans, growth opportunity in India and more.

Edited excerpts:

IBM has partnered with the Indian government to work with Watsonx AI platform and semiconductor R&D. Can you share the details on the scope of the partnership, projects in the pipeline, and the use cases being developed?

We have got MoUs and we have been sharing our perspectives and points of view with the government. These are usually directional agreements that we sign, and then you get down to specifics. So it is very difficult to point out we are doing this and that.

We signed three MoUs last year. One was in the area of AI, the second was on semiconductors, the third relates to quantum computing. Activities across all three areas are in different stages.

For AI, we had basically said that we will make our platform available for scaling AI in India, specifically in the area of startups. So, this is an instantiation of what we have put on Airawat (AI supercomputer) and Watsonx now for startups.

You have recently spoken about IBM’s ambitions to focus on semiconductor R&D. Can you take us through your India game plan for semicon R&D, since the industry is nascent in the country? Are there partnerships in place? Can you name a few?

We are the leaders in semiconductor R&D, globally. We have just recently released a 5 nanometre (nm) chip for our mainframe, for the AI and the GPU space.

We are working on a 2 nm chip, not only ourselves, but through the Rapidus consortium. This consortium is built with the Japanese government and it is acting as the R&D partner.

Now we are not in the fab and packaging area, but I think the two areas where we are very advanced is how we continue to make advances in chip design and chip research, and also how we continue to enhance that for upcoming technologies .

We do that through our semiconductor centre in Albany, New York, where, in collaboration with the State of New York, we have actually created a state-of-the-art R&D centre for semiconductors. Here, we have actually brought together, probably, an ecosystem partner that is relevant in this space.

The creation of ecosystems is really important, because one player can't do it all. That continues to be a focus for us. That is the area where the Indian government has been liking what we are doing. Even while the semiconductor mission was being developed, we had actually provided one of our leading experts, who was seconded to the government just to do this, and was not connected with IBM. He was just working with the government behind a wall, helping them think through this.

And now we are very open to partnering with Indian companies which want to sort of move forward in this domain. We have announced an MoU with L&T on this recently.

How has Watsonx and IBM’s other AI offerings scaled up in India since last year?

Watsonx is a platform. And a platform, by its very nature, means that the components of that platform are inherently valuable to an enterprise. However, its components can also act alone and add value in specific domains.

Watsonx platform has three components that are very critical to scaling AI. First is the data, Watsonx.data, which is essentially a mechanism to organise your data in a way that makes it conducive and effective to be used for AI applications. Watsonx.AI ia studio which can use multiple models, IBM models, other models, and Meta models to enable people to build AI applications which are targeted at the needs of a client.

And the third is Watsonx.gov, which is a governance module that actually enables you to adhere to the tenets of responsible AI, in terms of model management, data provenance, data governance -- all of the above. So those are the three components of that model. And the whole platform is multi-model by nature, i.e., it can use multiple models. It's hybrid by design, which means it can work on-premise, private cloud, public cloud, all of the above.

I don't know how to quantify IBM- specific offerings. I will tell you that there are clients like Adani, GS Lab and Quantum Street AI. There are several instances where AI is getting embedded into solutions and they are using it. We have clients that are doing POCs (proof of concepts) and experimenting with AI.

We have GSI (global system integrator) partners like Infosys which have stopped its development on its governance module and have adopted IBM's Watsonx.gov as its standard for governance, AI governance. So, I mean, those are the data points I can give you. I can't link it to a number.

You have always been bullish on India demand, despite the recessionary situation globally. Now with the first Fed rate cut in the past four years and also ever since you took over as the India MD, have the conversations with customers started to change? Are you expecting more demand?

India, as a market, is always very cost-sensitive and very deliberate in terms of what it does.

India, as a market, is growing. You have digitisation, which the honourable PM is talking about, and everyone else is rushing to do because they need to be digitised to compete with the world. So, that is what we have to look at as our indicator.

The question isn't whether it is growing or receding. Technology has always acted as a deflationary trend. The question is: are you aligning yourself to what the market needs? That becomes a critical question. I mean, I do believe that our strategy is well aligned to where the market is moving, like hybrid cloud and AI automation.

Ultimately, all of that is geared towards driving productivity, efficiency and better customer service.

Globally, tech giants are talking about multi-cloud integrated with AI solutions being the next phase of cloud growth and innovation. For instance, recently, Oracle partnered with AWS, Microsoft and Google. How is IBM exploring the opportunity?

We talked about multi-cloud and interoperability five years ago. Why do you think we made the $33 billion Red Hat acquisition? We saw this coming, way back. Multi-cloud interoperability was underlying the Red Hat acquisition. We saw it coming. It is not will happen, it is happening.

It is going to happen. It is happening now. The core stuff is on-prem. Some stuff is on public cloud, some is on private cloud. That interoperability is what is driving growth for Red Hat. We saw it five years ago. With Watsonx.gov, we saw it two years ago.

So, multi-cloud and interoperability is the fundamental bedrock of what we have been saying since five years. That is what Arvind's (IBM CEO Arvind Krishna) big bet was. At that time, everyone was saying everyone will just move to the public cloud. That has changed.

What would multicloud interoperability really mean for the tech product and services industry in the coming years? Will revenue models get hit or changed?

For tech companies, it is about how effectively you are going to enable the software and hardware to be interoperable. How do you make data interoperable across these platforms?

IBM continues to lay off globally as a part of the $400-million ‘workforce rebalancing’ plan in 2024. What has been the India impact? Are you still hiring in India for other roles? What’s the hiring plan here?

India is a growth market and we will continue to grow in the areas that we are finding relevant in the market. Go and look at ibm.com and India jobs.

(According to IBM’s website, there are over 10,000 job openings across software engineering, sales, consulting, cloud, Watsonx & AI, data & analytics and other roles.)