Govt May Tap Into Viability Gap Funding To Create More Compute Capacity: IT Secy

Ministry of Electronics and Information Technology (MeitY) secretary S Krishnan has reportedly said that the government may tap into “viability gap funding”(VGF) to create more “compute capacity”.

As per PTI, he added that the Centre will look at exploring the VGF route once high-tech “compute” capability has been built under the INR 10,372 Cr India AI Mission. 

For the uninitiated, viability gap funding is a government-backed financial support scheme that helps turn commercially unfeasible projects into reality. Meanwhile, compute capacity simply refers to the computational resources required for artificial intelligence (AI) to perform tasks.  

Of the total INR 10,372 Cr outlay for the AI Mission, Krishnan said that more than INR 4,500 cr has been earmarked for compute capacity.

“Later on, there is a possibility, and we will decide based on how much compute capacity actually gets created in the country. There is a possibility that we would actually support more compute capacity being created on the viability gap funding,” the MeitY Secretary reportedly added. 

Addressing the event, Krishnan said that the government’s “vision” is to create compute capacity on a public-private partnership model, adding that the Centre is attempting to build two such models. 

“There are two models that we are attempting. The first one has already launched the RFPs out there, and that is more a voucher base approach where we are asking people who have already created AI compute capacity to make it available to innovators, startups and MSMEs and academic institutions at a subsidised price,” the MeitY Secretary added.

It is pertinent to note that the Centre reportedly sought bids for the empanelment of entities to offer AI services on cloud under the AI Mission. 

Additionally, he said that the compute capacity is also being created under National Supercomputer Mission (NSM), which will cater primarily to the demands of the public sector. 

The government’s flagship IndiaAI Mission aims to create a robust AI ecosystem in India by democratising access to compute power, developing indigenous AI capabilities, backing AI-powered startups, scaling up AI applications across industries, among others. 

To fuel this, the Centre plans to procure 10,000 GPUs, which will be made available to various stakeholders including startups, MSMEs and institutions at subsidised rates. Under the mission, Indian authorities have proposed to pay up to 50% of the GPU cost by giving vouchers to various institutions and others.

At the heart of all this is the ongoing AI boom, which has gripped India. The country is home to more than 100 startups that have raised more than $600 Mn in funding between 2019 and H1 2024. 

As per an Inc42 report, India’s GenAI market is expected to see a major boom in the coming years and is projected to cross the $17 Bn mark by 2030.