Indian Artificial Intelligence (AI) startups specializing in generative AI (GenAI) have defied the global funding winter by securing an impressive $700 million in investments over the past three years. These promising figures, according to estimates by the National Association of Software and Service Companies (Nasscom), highlight the growing confidence in the AI ecosystem in India.
The Indian GenAI scene has witnessed substantial growth, with over 100 startups currently operating in the space. Notable examples include Sarvam AI, a Hindi language model maker, and Adobe’s acquisition of Rephrase.ai, both of which validate the thriving AI landscape in India. In terms of funding, the year 2022 proved to be the most successful, with a staggering $566 million invested in GenAI startups. This was followed by $144 million in 2023, showcasing a steady upward trend.
Within the GenAI sector, investments have been diverse, with a focus on areas such as text content creation, chatbots and virtual assistants, as well as image and video generation. Text content creation accounted for 18% of the investments, followed by chatbots and virtual assistants at 18%, and image and video generation at 16%.
Sangeeta Gupta, Senior Vice President and Chief Strategy Officer at Nasscom, noted that investments have grown steadily in 2023, as startups began to realize the potential of GenAI applications. Gupta emphasized the positive outlook for funding in 2024, as all stakeholders continue their efforts to support the AI ecosystem.
Looking at the broader AI landscape, Nasscom estimates that AI startups in general received a total of $8 billion in private investments between 2013 and 2022. Out of this, $3.24 billion was secured in 2022 alone across 1900 AI startups, marking it as the most active funding period for AI.
The previous year saw significant advancements in GenAI innovation, with major tech companies and startups developing large language models trained on various Indian languages. Startups like Corover.ai launched BharatGPT, a language model trained in 14 Indian languages for text, voice, and video interactions. Sarvam AI unveiled OpenHathi-Hi-0.1, an open-source Hindi language model based on Meta’s LlaMa 2-7B model. Mobility unicorn Ola introduced the Krutrim LLM, capable of comprehending 22 Indian languages and generating responses in 10 languages. IT services leader Tech Mahindra is also working on ‘Project Indus’, an LLM trained in Hindi and 37 Indic dialects.
Furthermore, companies such as Flipkart and SaaS provider Ozonetel are exploring smaller language models tailored for specific domains and trained on smaller datasets.
The success of Indian GenAI startups and the significant investments they have attracted signify the confidence and support for the country’s AI ecosystem. With continued advancements and breakthroughs in GenAI innovation, India is poised to remain a key player in the global AI landscape.
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