Decoding India’s $17 Bn+ Generative AI Market

Turning Data Into Gold: Decoding India’s $17 Bn+ Generative AI Market

SUMMARY

The market size of GenAI in India will grow 15.4x in the next seven years

India is ahead of the US in terms of AI adoption by businesses

Can GenAI introduce artificial intelligence to the Indian population and industries at large?

It is no hype; the next big thing in technology has finally arrived. Generative AI, or GenAI, (as well as intelligent automation) has taken centre stage in the fifth industrial revolution. Worldwide, IT behemoths and young startups are equally keen to leverage the incredible potential of GenAI, which is transforming work and life. More importantly, India is currently at the forefront of this global technology shift.

After the virality of ChatGPT, we know that GenAI is a subset of conventional artificial intelligence, or general AI, which has replicated human-like intelligence. But generative AI has gone way beyond that. It uses advanced algorithms to learn from existing information and produces unique results that closely resemble human creativity. But it is not the same as predictive AI, designed to forecast outcomes based on historical data.

Moreover, GenAI adoption does not pose much difficulty as popular tools like ChatGPT (OpenAI) and BARD (a GenAI chatbot from Google) can easily perform complex machine learning operations.

Analysts also predict GenAI’s rapid adoption among consumers and businesses across various applications, including text, image, audio and video, 3D, code generation and more.

According to Inc42’s latest report titled India’s Generative AI Startup Landscape, 2023, the country’s GenAI market will be growing exponentially in the next few years. It is projected to surpass $17 Bn by 2030 from $1.1 Bn in 2023, growing at a CAGR of 48%.

This meteoric rise is attributed to the innovative prowess of India’s GenAI startups, with one in every three focussing on the code and data segment, laying the foundation for AI-driven solutions.

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The Booming GenAI Startup Landscape In India

India is home to more than 70 GenAI startups, which raised $440 Mn+ between 2019 and Q3 2023, according to the Inc42 report.

More than 80 Indian institutional investors are backing these startups and propelling India’s GenAI ecosystem into the global spotlight. This remarkable journey is shaping the future of the next-gen technology with a fusion of innovation, investment and transformative potential. As a result, India is emerging as a powerhouse in the GenAI revolution, and the world is noticing.

Here’s a look at some of the key statistics from India’s fast growing GenAI startup landscape.

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India’s GenAI products also stand out for their versatility. Around 81% of these are sector-agnostic, ensuring their usage across industry segments. Also, Bengaluru, known as the Silicon Valley of India, leads as the city with the highest concentration of GenAI startups.

The GenAI market in India is at the intersection of innovation, entrepreneurship and technology growth. The Inc42 report will help readers delve deep into this dynamic ecosystem, providing insights into emerging trends, challenges and the promising future of GenAI.

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Just as the rapid progress of digitalisation and cloud computing has transformed India’s tech landscape, the growing demand for content and code generation, rethinking how work gets done and helping people keep up with technology-driven change drives the importance of generative AI. The AI scenario in India is booming further due to access to vast quantities of structured data, new developments in AI models and the sweeping wave of workflow automation.

Industry	Key Players	What They Do
IT	Infosys, TCS, HCL Tech, Wipro, Tech Mahindra, LTIMindtree	Indian IT majors claim they have built capabilities, skilled their workforce and bagged several GenAI projects. These include industry-specific models to drive enterprise adoption of GenAI; versatile LLMs; content and code generation; copywriting; marketing and other proprietary solutions such as Canvas.ai (launched by LTIMindtree) and Topaz (developed by Infosys to enhance offstore customer experience)
Ecommerce, Quick Commerce, Retail Commerce	Flipkart, Myntra, Blinkit, Vue.ai	Walmart-owned Flipkart has rolled out chatbots for shoppers and sellers, upgraded search based on LLMs and developed in-house GenAI tools for better productivity and efficiency. Myntra is now focussing on MyFashion GPT, a combo of proprietary and open-source tools, for personalised recommendations from its catalogue. Its GenAI prowess results in better search accuracy, trend tracking and demand prediction. Q-commerce specialist Blinkit offers Recipe Rover, a GenAI-powered recipe engine. One can cook these dishes immediately as all ingredients are available in the online supermarket and can be instantly delivered. Blinkit uses ChatGPT, Stable Diffusion 1.5 and Midjourney for enticing text and stunning visuals. Vue.ai uses generative adversarial networks (AI ML frameworks) for on-model product images, personalised styling and hyper-personalised customer experiences to optimise fashion retailing.
On-Demand Food Delivery	Zomato, Swiggy	Zomato has developed an AI chatbot to help place orders and a multiple-agent framework to carry out a variety of tasks. Per a Zomato blog post, the chatbot “aligns with your momentarily unique food & beverage preferences, dietary needs, and even your moods”. Swiggy has built an LLM-based neural search that understands all food-related terms, queries, culinary preferences and needs. Additionally, a Dineout conversational bot guides users to preferred restaurants and GenAI-led solutions are now developed for its restaurant networks and delivery partners.
Content Generation/Curation/Marketing	Instoried, Pepper Content, Gan.ai	Built on complex NLP algorithms developed in-house, Instoried promises to enhance content and comes with sentiment analysis, grammar and plagiarism checkers. Peppertype.ai is a content marketing platform launched by Pepper Content. It can ideate, create and distribute marketing content, optimise the same for search engines using automated audits and measure ROI. Gan.ai, another content creator and moderator, enables businesses to repurpose videos at scale.
Business Applications/Helpdesk Support/CRM	Zoho, Freshworks, Haptik, Gupshup.io, Velocity AI, Cubehq.ai	Zoho has integrated GenAI capabilities via OpenAI/ChatGPT to generate personalised content, recommendations and interactions to help with sales, customer support and social media management. Using GenAI technology, Freshworks has launched an all-in-one customer service suite that has integrated self-service bots, agent-led messaging and automated ticketing to provide a comprehensive customer support experience. Haptik has added GenAI/ChatGPT capabilities to optimise enterprise-level chatbots and ensure free-flowing conversations. Based on core models like Meta’s Llama 2, OpenAI GPT-3.5 Turbo, Mosaic MPT and Flan T-5, Gupshup, a conversational AI platform, has launched a set of LLMs for marketing, commerce, customer support, HR and IT for diverse industry segments such as banking, retail and utilities. Velocity AI is a security analytics startup building data protection solutions for generative AI systems. Powered by ChatGPT, Cube enables businesses to manage online reputation and personalise customer care at scale.
HR/Workforce Management	BetterPlace	An AI-based workforce management SaaS platform, BetterPlace uses GenAI and GPT models to optimise hiring, onboarding, performance tracking and performance analysis.
Travel & Hospitality	ixigo, OYO	Based on Open AI’s ChatGPT, travel marketplace ixigo offers a personalised trip planner called PLAN, where users need to input their preferred destinations to get an extensive itinerary. This can be moderated further for a fully personalised travel plan. IPO-bound OYO has recently introduced a ChatGPT-powered virtual front desk for self-check-ins in the UK.
Edtech	Unacademy	Edtech major Unacademy has released Cohesive AI to develop AI-generated content for sales & marketing, customer support and creators. It includes 100+ pre-built content templates and other real-time collaborative features.
Medtech	Suki AI	Leveraging GenAI, Suki has developed a proprietary voice platform and a voice assistant for creating clinical documents by ambiently listening to patient-clinician conversations.
Fintech/Investment Tech	Mudrex	Crypto investment platform Mudrex, a registered virtual asset service provider, has developed the AI chatbot SatoshiGPT for crypto education.

Source: Company websites, secondary sources

The Road Ahead

Interestingly, the adoption of artificial intelligence in India surpasses both the US and the global average. According to the 2022 IBM Global AI Adoption Index, India has an adoption rate of 57%, while the international and the U.S. rates stand at 25% and 34%, respectively.

A survey published by IBM also underlines that the elevated adoption of AI across the Indian business landscape can be attributed, in large part, to the prominent role played by large IT companies in the country. An astonishing 66% of the surveyed IT professionals indicated that their organisations actively incorporate AI into operations.

Meanwhile, the Indian government has been actively promoting the development of National AI frameworks, AI training modules and a GPU Cluster to facilitate the creation of AI applications.

The government firmly believes AI can propel India towards a $1 Tn digital economy by 2025-26. As a result, the country is progressively solidifying its position as a global partner in the AI technology space.

For instance, during an interaction with Inc42 at Gitex Global 2023, H.E. Omar Sultan AlOlama, the UAE’s Minister of State for AI, emphasised the collaboration between the two governments to enhance connectivity and explore innovation opportunities in areas like AI, robotics and space systems.

As we move ahead, the ascent of generative AI in India will continue to captivate, challenge and inspire us. In these exciting, tech-powered times, we have trailblazers inventing, go-getters establishing businesses and the masses reaping the rewards of these remarkable developments. It is an era of unprecedented transformations, and we are all active participants in this unfolding narrative!

Let curiosity and excitement guide you as we enter the world of generative AI, a journey that promises a compelling saga of innovation, creativity and boundless potential. To gain a competitive edge in India’s growing GenAI market, explore our latest report – India’s Generative AI Startup Landscape 2023. It will be a valuable playbook for entrepreneurs and investors seeking actionable insights.

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Edited by Sanghamitra Mandal