The new monster wave: GenAI

S Mohini Ratna, Editor, VARINDIA

Gen AI, is expected to boost India's GDP by $359-438 billion by 2030, representing a 5.9%-7.2% increase. There's a strong interest in GenAI (short form of Generative AI) in India, but significant investments in education and upskilling are needed to bridge the gap and fully unlock its potential. The current AI landscape with the 1990s web browser era, dubbing it the new “monster wave”.

A million dollar question comes to mind, is India prepared to ride this wave? Well, the query finds its origin on the back of recent developments in the AI space, which point to one thing - is it time for the GenAI industry to bear the load of policy or regulatory uncertainties similar to any other sector or industry?  

To unlock this potential, increased investment in AI research, education, and upskilling is crucial, ensuring inclusivity and propelling India towards a prosperous and equitable future.

Organisations are swiftly adopting an AI-first approach to digital transformation, aiming to enhance customer engagement, increase productivity, and achieve greater agility in delivering digital capabilities using innovative foundation models and AI-first solutions.

A major hurdle is the lack of skilled professionals to develop and implement GenAI solutions. Up to 52% of organizations surveyed by EY identified this as a key challenge. Only around 26% of Indian companies are considered fully prepared to leverage AI technologies.

GenAI, the next frontier in artificial intelligence, promises to revolutionize the retail experience by tapping into vast repositories of unstructured data. Traditionally, the industry has relied on data to predict consumer behaviour and handle inventories. However, the current retail investments in AI, pegged at US$5 billion, is expected to soar to US$31 billion by 2028.

GenAI could potentially elevate the retail sector’s profitability by 20% by 2025. Retail investments in AI are expected to soar to US$31 billion by 2028. 71% of Indian retailers plan to adopt GenAI in the next 12 months.

Secondly, around 69 per cent of the overall impact of GenAI on India's GDP is expected to be derived from sectors such as business services (including IT, legal, consulting, outsourcing, rental of machinery and equipment, and others), financial services, education, retail, and healthcare. 
Implementing measures like enabling access to training data and marketplaces, deployment of GenAI systems as Public Goods, securing critical digital infrastructure and access to talent and public funding of R&D will help foster GenAI innovation.

Although the government’s intentions to give a boost to the AI space cannot be doubted, there is a tremendous sense of optimism in AI to realise its full potential, considering GenAI’s immense potential to act as an economic growth catalyst. 

Currently, industry stakeholders seem to be white knuckling their way through the number of announcements being made for the sector. While the government has somehow managed to take a balanced leap in regulating and providing support so far, it is the fear of the unknown, driven by the examples of fintech, crypto and other industries, which have triggered nail-biting across this burgeoning space.

Implementing measures like enabling access to training data and marketplaces, deployment of GenAI systems as Public Goods, securing critical digital infrastructure (through the roll-out of 5G, data centers, access to specialised chips and AI-specific compute infrastructure), and access to talent and public funding of R&D will help foster GenAI innovation. 

Experts predict that, the extent of GenAI's influence in each sector will depend on factors such as feasibility, rates of adoption, and the respective contribution of each industry segment to India's economic activity. The report underlines that, around 60 per cent of these organisations surveyed acknowledged that GenAI had an impact on their businesses. 

Moving forward, the technology does not just reduce overheads but can significantly increase sales through tailored consumer experiences. Even local retailers can provide ‘hyper-local’ personalized shopping experiences by integrating GenAI tools. This along with its IT prowess, India could emerge as a global nucleus for GenAI retail solutions.

Enterprises worldwide are increasingly turning to GenAI for several reasons. However, it's essential to recognize that with the immense potential of GenAI come challenges such as data privacy concerns, ethical considerations, and the need for skilled talent to develop and manage AI systems.
Indeed, the rapid growth of technology and data has fundamentally reshaped how enterprises operate and innovate. GenAI, has emerged as a pivotal force in this evolution. By leveraging artificial intelligence (AI) and machine learning (ML) technologies, GenAI enables enterprises to harness the power of data in unprecedented ways.