Mumbai: India’s AI market is expected to grow at a compound annual growth rate (CAGR) of 25-35% to $17 billion by 2027, according to a report by Nasscom and the Boston Consulting Group.
This growth will be fuelled by multiple factors, including increasing enterprise tech spending, India’s growing AI talent base and a significant increase in AI investments, according to the report titled “AI Powered Tech Services: A Roadmap for Future Ready Firms; AI & GenAI’s Role in Turbocharging the Industry.”
“As the investments in AI continue to increase, the demand for AI talent in India is also expected to grow at 15% CAGR till 2027,” the report said.
Several leading firms have invested heavily in upskilling and reskilling their workforce in AI and related technologies, allocating $1 billion over the next three years for the same. This investment recognizes the importance of human capital in the AI journey.
Globally, investments in AI have grown at a compounded annual growth rate of 24% since 2019, with $83 billion invested in 2023. The majority of these investments have been channeled to AI applications in data analytics, GenAI, machine learning algorithms, and platforms.
India is among the top five nations with 14 times growth in individuals skilled with AI in the last seven years and has the second-highest installed talent base, with 420,000 employees working in various AI job functions, the report said.
“Indian tech companies, with the advent of Generative AI, are expanding their portfolios beyond traditional IT and business process management to include AI-driven analytics, intelligent automation, and personalized customer interactions,” said Debjani Ghosh, president, Nasscom.
Nasscom and BCG conducted a survey with over 65 respondents across larger tech, mid-tech, business process management (BPM), and global capability centers (GCC) companies. The survey revealed that 70% of the respondents have well-defined frameworks for financing use cases in terms of capabilities and investment. More than 70% of companies have AI partnerships in place predominantly with GenAI and cloud partners.
Companies have onboarded dedicated AI leaders and have strong CXO leadership buy-in on the AI agenda. Over 68% of respondents have dedicated executives leading AI initiatives, and more than 58% of respondents have senior leadership committed to AI initiatives.
“The exponential growth of India’s AI market underscores the country’s crucial role in driving global innovation. This is seen in all aspects – investments within India, use cases across a range of industries, and growth and scale of talent we are seeing in India,” said Rajiv Gupta, managing director and senior partner of BCG.
Indian companies are starting to keep pace with the growth of AI and the tech sector is creating future-ready organizations with dynamic and evolving centers of excellence driving the AI agenda, Gupta said.
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Published: 20 Feb 2024, 05:25 PM IST