GenAI Adoption Cautious In India, 66% Unicorns Embrace AI: EY Report
EY report finds Indian businesses cautiously adopt Generative AI, with startups leading the way and established firms taking a measured approach
EY India's recent report, "Is Generative AI beginning to deliver on its promise in India? - EY AIdea of India Update," sheds light on the cautious GenAI adoption landscape in India. While 66 per cent of the nation's top 50 unicorns embrace AI or GenAI, traditional businesses are taking a measured approach, showcasing a divide in adoption rates.
In contrast, established Indian enterprises are taking a more measured approach. The report suggests that around 15 to 20 per cent of their GenAI proofs of concept (POCs) have transitioned to production. Key concerns for these organisations include the potential for factual inaccuracies in Large Language Model (LLM) outputs, data privacy and security and the overall cost of deployment.
Mahesh Makhija, Partner and Technology Consulting Leader, EY India, emphasises the need for enterprises to move beyond experimentation and identify "fit for purpose" use cases that can deliver immediate value. He stresses the importance of building robust AI platforms, managing the total cost of ownership and remaining flexible to adopt hybrid approaches due to the restricted availability of certain GenAI models in India.
The report also explores the most prevalent GenAI use cases within Indian businesses. Roughly one-third involve intelligent assistants for automating specific tasks. Marketing automation, powered by text generation and multimodal capabilities like text-to-image and text-to-video, accounts for another quarter.
Additionally, document intelligence is emerging as a significant area, with nearly 20 per cent of use cases focusing on document summarization, knowledge management, and improved search functionalities.
EY's report builds upon their previous analysis, "AIdea of India Generative AI's potential to accelerate India's digital transformation", released in December 2023. The latest update delves deeper into adoption trends, alongside the rapid innovation by GenAI platform providers, the rise of Indian-specific LLMs, the evolving AI investment landscape, and policy developments impacting the Indian AI ecosystem.
The Indian AI investment landscape is experiencing a shift, with a focus on sectors beyond just healthcare, life sciences and financial services. The first quarter of 2024 witnessed a diversification into areas like technology, industrial and energy utilities, and consumer packaged goods. Investors in AI companies are prioritising three key aspects: evaluating AI performance and its potential impact, understanding cost implications, and ensuring compliance with relevant regulations.
Further, the GPU infrastructure, crucial for training models and integrating GenAI into applications, remains a concern. The report acknowledges the rising cost of GPUs due to surging demand. However, initiatives by the government, large corporations and startups to build domestic GPU infrastructure are expected to bolster enterprise adoption of GenAI in the future.
In addition, the EY report portrays a cautious yet optimistic outlook for GenAI adoption in India. While established businesses navigate concerns and build capabilities, digitally native players are forging ahead with GenAI integration. Continued innovation, infrastructure development and a focus on practical applications are expected to propel India's GenAI adoption in the coming years.
