In just a year, India has transformed into a burgeoning global center for artificial intelligence (AI) innovation. Once lagging behind the Bay Area’s deep learning expertise, India is now witnessing a surge of AI applications developed across various sectors, fueled by engineering talent and access to proprietary data.
The year 2024 marks a significant turning point, with Indian engineers creating cutting-edge AI solutions without requiring the specialized deep learning PhDs that once dominated the field. This shift has been driven by the increasing number of AI startups building solutions atop large language models (LLMs).
“India is rapidly becoming a global hub for AI applications,” says Shekhar Kirani, a partner at venture capital firm Accel. He points to India’s unique advantage—its vast services sector and rich datasets for training AI models—as a key factor in this growth.
India’s Unique AI Advantage: Engineering Talent Meets Proprietary Data
India’s services sector, which includes industries like call centers, healthcare management, IT, and accounting, provides a wealth of trainable data. According to Kirani, this makes the country a “goldmine” for developing AI solutions tailored to specific industries. Indian engineers are capitalizing on this data to build applications that are transforming traditional workflows.
One standout example is a Bengaluru-based team that developed an AI application to automate the 10-Q filings process for US companies. Typically handled by accounting firms over several days, the team used open-source LLMs to train a deep-learning model, reducing the time to generate these reports to under an hour.
Other examples include CareStack, a dental practice management software company from Kerala, which built an AI solution that automates data entry based on voice annotations from dentists. Similarly, Zenoti, a management software provider for spas and salons, developed an AI-powered system that handles real-time appointment scheduling and customer queries.
“These companies are leveraging proprietary datasets, combined with existing LLMs, to create AI-driven solutions that are revolutionizing industries,” Kirani explains.
India’s Growing Role in AI Applications
While Kirani acknowledges that India may not outpace global players in building core LLM engines, he emphasizes that the country’s strength lies in adapting these engines for enterprise use. “India’s combination of engineering talent, industry expertise, and access to trainable data gives us a clear advantage in building AI applications on top of LLMs,” he says.
Indian engineers, often with just a few years of experience, are developing AI solutions that personalize and integrate LLMs for specific enterprise needs. Kirani predicts that India will lead the way in creating middleware and application layers for LLM engines, setting itself apart by customizing AI to meet industry demands.
The Impact on India’s SaaS and IT Industries
The fusion of AI with India’s SaaS and IT services industries presents a massive opportunity for growth. With a USD 250 billion IT services industry, India is partnering with SaaS startups to offer AI-powered solutions on an outcome-based pricing model. This integration of AI is reshaping the rules for both SaaS companies and the services industry as a whole.
“Much like the disruption in global telecom prices that fueled the rise of India’s services companies, AI is now poised to elevate Indian SaaS companies to the next level,” Kirani explains.
He believes that Indian startups, leveraging engineering talent and innovative business models, will emerge as global leaders in AI productized services over the next decade.
A New Wave of Tech Disruption
The AI wave in India is just beginning, and Kirani predicts that companies failing to adapt will be left behind, while a new generation of startups will rise. Accel is betting heavily on this transformation, investing in AI-powered services that are expected to disrupt the global technology landscape.
“The future is bright for Indian startups that embrace the fusion of AI and services,” Kirani says, forecasting a new era of tech disruption led by India’s rapidly growing AI ecosystem.
As India’s AI capabilities continue to evolve, the country is positioning itself as a key player in the global AI landscape, with engineers and startups driving a new wave of innovation.
