India Should Focus On Cost-Effective AI Innovation: Mohandas Pai

SUMMARY

Citing his rationale, Pai said that the country cannot afford to put billions of dollars annually into AI R&D

This approach of building applications on top of LLMs, Pai said, would potentially position India as a dominant digital power in the coming decade

Pai added that innovation cycles will accelerate as AI takes over routine tasks and streamlines workflows

Former Infosys CFO and partner at Aarin Capital TV Mohandas Pai reportedly believes that India should focus on “cost-effective” ways to fuel advancements in the artificial intelligence (AI) space.

Citing his rationale, Pai, as per Business Standard, said that the country cannot afford to put billions of dollars annually into AI research and development (R&D).

“We can’t put billions of dollars in R&D every single year because we don’t have that kind of money. What DeepSeek did is very unique. They brought down the computing requirement by 75%,” he said at the TiEcon Mumbai 2025 event.

The veteran investor also underscored that Indian AI companies should focus on developing vertical large language models (LLMs) catering to areas such as financial services, healthcare, and high-tech manufacturing, rather than competing with horizontal LLMs such as ChatGPT and DeepSeek.

This approach of building sector-specific applications on top of foundational AI models, Pai said, would potentially position India as a dominant digital power in the coming decade.

He added that innovation cycles will accelerate as AI takes over routine tasks and streamlines workflows.

“Greater discoveries and innovation will happen faster. Innovation cycles will come down because innovation includes search, reasoning, and the creation of models, which can be done by AI,” Pai added.

He also called on the government to prioritise five to six areas of technology, namely AI and machine learning, robotics, hyper quantum computing, biogenomics and biotechnology, and high-tech manufacturing, to foster innovation in the country.

“We’ve got to pick these five areas and invest in them through public money, put a billion dollars a year in each one of them, get a coalition of hundreds of our best engineering schools, get a coalition of industry working with them and join together to accelerate the process of innovation,” Pai further added.

Underlining the need to attract foreign capital, he also called on the Centre to formulate better methods for the ease of doing business in the country.

The comments come at a time when AI is witnessing rapid adoption across the country. With an eye on fostering further innovation in the space, the union government has undertaken a slew of steps including the INR 10,300 Cr IndiaAI Mission and the launch of key AI initiatives in the past few weeks.

Just days ago, the Ministry of Electronics and Information Technology (MeitY) released the “Competency Framework for AI for Public Sector Officials”. In the report, the ministry pitched setting up a dedicated AI governance board to review and authorise AI applications.