AI applications from India can command a share in global economy, say investors

India faces a massive gap in access to quality education, healthcare, skilling, and other services for its diverse population—challenges that can be addressed with the help of artificial intelligence (AI), while also building solutions for the global market, say top investors.

India can be a fast-mover to corner a share of the economic growth brought about by AI with the right impetus. 

“Foundation models are hard to build in India for AI, while we are not late to build the application layer which is just starting. The capital base in India is very strong today… if few trillion dollars of value is created [globally] because of AI, given the talent base India has, it is possible to create 10% value from India,” said Mukul Arora, Co-Managing Partner at early stage venture capital firm Elevation Capital.

Speaking at TechSparks 2024, Arora, however, cautioned that India will have to work hard to secure its share of the market.

Ashutosh Sharma, head of investments for India and Southeast Asia at Prosus Ventures, noted that AI can help create customised solutions for India’s population.

 “The beauty of AI in India is we have a problem of access to quality education, health, skilling, etc. We have tried hard to figure out ways to customise the access to quality education etc through internet 1.0 and 2.0 [but the impact] is very limited without AI,” said Sharma. 

“We have a problem and we have technology and we need someone in the middle to build [solutions],” he added.

The investors also warned against jumping into a sector just because it’s currently ‘hot’ or ‘in demand.’

"Because of something that has happened over the last two years in the space, I will not back off. A founder’s job is to prove the unproven. Education and access to quality education is a big problem to be solved," said Sharma. "The onus is on us to figure out what product fits the market; unfortunately for us, there is very little to show for it." Prosus is also an investor in edtech companies BYJU’S and Eruditus in India. 

Arora echoed this sentiment, emphasising that the true measure of any idea’s success is achieving Product-Market Fit (PMF) and customer validation.

“Always listen to your customers. If you are getting validation there, then the next question is how to scale it. Don’t worry about what the VCs are thinking, if they think a sector is hot, it is already too late,” cautioned Arora. 

While starting up in India has never been easier—with access to capital, technological advancements, and entrepreneurs who have set a global benchmark—the investors emphasised the need to focus on solving unique problems for Indian consumers with high-quality solutions.