Technology Innovations and India Opportunity

The Turing Test, a measure of determining whether a machine could demonstrate human intelligence, formed the premise of Alex Garland’s spooky thriller Ex Machina. In the real world perhaps we are not too far away away from an Ex Machina style future. We may argue whether humanity is ready for it or not, but progress in AI and other technologies of the future is unstoppable.

One proof of this unstoppable progress is the capital deployed by investors and big corporations. Google, for example, has invested more than $540 Million in AR firm Magic Leap. Then there is Facebook which paid a whopping $2 Billion to acquire VR company Oculus at a fairly early stage. In fact, startups are racing to leverage these technologies and investors are racing to find and fund such startups.

Globally over 550 startups, with AI as core, have raised more than $5B in 2016 alone. The number of deals increased from 160 in 2012 to 658 in 2016. Between 2012 and 2016 the total investments in AI based startups stood at approximately $12.5B. India ranked 4th with just 3.5% of that total investment behind US (61.7%), UK (6.5%) and Israel (4.3%). For 2017, global financing for AI start-ups is projected to surpass $10.8 billion — nearly double the $5.6 billion spent in 2016.

The Turing Test, a measure of determining whether a machine could demonstrate human intelligence, formed the premise of Alex Garland’s spooky thriller Ex Machina. In the real world perhaps we are not too far away away from an Ex Machina style future. We may argue whether humanity is ready for it or not, but progress in AI and other technologies of the future is unstoppable.

One proof of this unstoppable progress is the capital deployed by investors and big corporations. Google, for example, has invested more than $540 Million in AR firm Magic Leap. Then there is Facebook which paid a whopping $2 Billion to acquire VR company Oculus at a fairly early stage. In fact, startups are racing to leverage these technologies and investors are racing to find and fund such startups.

Globally over 550 startups, with AI as core, have raised more than $5B in 2016 alone. The number of deals increased from 160 in 2012 to 658 in 2016. Between 2012 and 2016 the total investments in AI based startups stood at approximately $12.5B. India ranked 4th with just 3.5% of that total investment behind US (61.7%), UK (6.5%) and Israel (4.3%). For 2017, global financing for AI start-ups is projected to surpass $10.8 billion — nearly double the $5.6 billion spent in 2016.

Smarter Enterprises

Artificial Intelligence is finding applications in many sectors such as Healthcare, LegalTech, Cyber Security, FinTech etc.

Healthcare is one of the first and more popular areas of both AI and AR/VR applications. AI in healthcare dominates all other industrial applications of AI. Startups are using Machine Learning to reduce drug discovery time, improve diagnosis, and provide virtual assistance to patients. No wonder then AI in healthcare attracted $1.8B in funding since 2012 globally.

Similarly IoT is transforming traditional sectors such as logistics and manufacturing. IoT is also solving problems in Healthcare by improving patient monitoring and in Home Automation by allowing people to communicate with smart appliances.

Challenges

In hindsight the power of internet seems very obvious now but in mid 1990s one would be hard pressed to consider internet a core technology, let alone as something that could contribute more than $1 trillion in GDP in the US alone. In the same way I believe AI, IoT and other emerging technologies such as blockchain have the power to revolutionize the way we lead our lives.

But, just as Internet found some not so favorable applications such as proliferation of pornography and making classified and confidential information vulnerable to cyber attacks, we will discover that these emerging technologies will also pose challenges.

From Bill Gates to Elon Musk to Stephen Hawking; many have called foul of AI. Elon Musk called AI an “Existential Threat” which will lead to WW3 and even went as far as saying that

“ AI is more dangerous than North Korea”.Stephen Hawking warned

“ in the future AI could develop a will of its own that is in conflict with ours”

and cautioned against making unchecked advances in AI.

These technologies are still nascent and are in their infancy. For example, we’ve all heard the unfortunate story of Microsoft’s Twitter chatbot unwittingly spewing anti-feminist rhetoric. My personal favorite is when a news reader reported a six year old girl ordering a doll house using Alexa Alexa devices in homes of unsuspecting viewers got triggered and ended up placing orders for the doll houses as well.

Way Forward

It is difficult to envision what the challenges will be. But, we can begin to understand the other side of these technological advancements by enabling more inter-disciplinary exchange of ideas.

In fact this is nothing new; at the time of Industrial Revolution the constant exchange of ideas between the sociologists, the politicians, the economists, and the industrialists made it possible for millions of people to acquire new skills and gain higher paying jobs as opposed them becoming obsolete. We are undergoing a technological revolution and we need to look to the broader group of people in guiding humanity to use these technologies for the greater good.

India Opportunity

As our ecosystem matures we need to move from a ‘knowledge economy to innovation economy’. For instance, according to a recent PwC report, AI alone is expected to contribute an additional $15.7 trillion to the global GDP by 2030. Take Blockchain startups and cryptocurrencies for example, the total value of cryptocurrencies reached a whopping $179 Billion. According to Coindesk, global VCs poured almost $1.9B into blockchain startups with countries such as Israel, Russia, and the US leading the way.

So, where are we in all of this? As I see it, India stands at a crossroads. It can either choose to build iterative startups — an Indian version of a global company — or it can build innovative companies and make itself relevant in global innovation economy.

Time and again, Indian entrepreneurs have stepped up to the challenge and delivered. We are undoubtedly seeing the next generation entrepreneurs solving quintessentially Indian problems but with cutting edge technology. Few of our own companies such as Vernacular.ai, Active.ai, and Embibe are doing so. So are Niki.ai, Sigtuple, and Mad Street Den.

The continued success of Indian ecosystem depends on many efforts coming together. It needs a constant pipeline of great founders with great ideas. It requires grants and support from the governments and the universities. It also requires that corporations invest in research houses and encourage intrapreneurship. We need all these to come together for India to leapfrog.

As a venture capital firm, we are actively looking to invest in sustainable tech enabled businesses. If you are a founder of such early stage company do write to us at [email protected] or apply here.

I am very optimistic about the future of our ecosystem. When I look forward, our country is poised to becoming the 3rd largest economy in the world in less than a decade. This can only mean one thing — that our startup ecosystem must gear up to fully tap this massive opportunity.

Acknowledging Karteek Pulapaka, a contributor to this article. Karteek is a Kstart fellow.

Note — Kalaari is an investor in Active.ai and Embibe. Kstart is an investor in Active.ai and Vernacular.ai. Kalaari or Kstart is not an investor in any other startups that may have been mentioned above.

Disclaimer : It is strictly an independent opinion of the writer, not representative of Kstart or Kalaari.