Introduction

The report Generative AI, Startup Landscape in India has been published by Nasscom in June 2023. With the recent rise in the use of the likes of ChatGPT and DALL-E, the power of Generative AI needs a revisit and the report gives us a view on generative AI trends across the globe and specifically, India.

The newly launched Generative AI has evolved significantly in leaps and bounds, particularly with advancements in deep learning and neural network architectures. Generative AI gained global attention when Microsoft invested USD 1 billion in OpenAI in 2019. The Indian Generative AI startup landscape too looks vibrant where number of startups have doubled in a couple of years and investment have crossed USD 475 million in the last two years.

The report highlights that the number of active generative AI startups worldwide is more than 550 and global private investment in generative AI crossed USD 2.5 billion in 2022. Factors such as Nvidia’s launch of the world’s first GeForce 256 general processing unit (GPU), massive investment to commercialize generative pre-trained transformer or GPT model and highly developed natural language interface have catapulted the market for generative AI into a high-growth trajectory. On the contrary, the Indian ecosystem boasts of 60+ generative AI startups with a 12X increase in funding. Interestingly, more than 50% of the startups are focused on text, images, and video. Also, a large number of generative AI startups are located in Bengaluru, the startup capital of India followed by Mumbai and Delhi-NCR.

However, despite a sizeable number of AI startups, 78% of them are yet to commercialize their products. Nevertheless, there is immense potential that the remaining 37% are likely to find markets within a year.

The report also highlights the challenges that the global as well as the Indian market might face. The challenges mostly pertain to unavailability of high-quality training data, High cost of compute resources and regulations regarding data privacy and security.

Relevance of the Report

As an increasing number of users are getting to understand the magic of generative AI, a detailed report on the latest global and national trends becomes helpful to understand how the technology is progressing. The report is just the right step towards this as it gives a holistic view on the global as well as Indian perspective that include recommendations for the investors, industry, government and startup themselves.

Key Takeaways

• Over the years, Artificial Intelligence have refined itself to generative AI and will soon shape into Artificial General Intelligence
• Total global private investment in AI has crossed USD 92 billion in 2022. More than 60% of such investments flow into text and visual media applications
• There are 14 global generative AI unicorns
• The performance of India’s AI startup ecosystem is noteworthy with more than 60 generative AI startups in the country
• Close to 80% of the Indian generative AI startups are building solutions in-house
• Investment in the generative AI landscape crossed USD 590 million of which 70% were received in 2022 alone
• Similar to global peers, Indian Generative AI startups offers solution across major categories. Most common use-cases involve text creation, chatbots and virtual assistants, image and video generation