India has the potential to be a global leader in artificial intelligence (AI), but it must carefully weigh its investments in building foundational AI models, Microsoft chairman and CEO Satya Nadella said on Wednesday.
Nadella highlighted the need for India to adopt cutting-edge AI work while remaining mindful of the capital-intensive nature of the field.
In response to a question from Abhishek Singh, additional secretary in the ministry of electronics and IT (MeitY), about whether India should focus on creating its own AI models or leverage open-source alternatives, Nadella pointed out the high costs associated with building large language models (LLMs).
“The real barrier to entry in large language models is the capital investment,” Nadella explained. “You may need to spend a billion dollars, 10 billion, or even 100 billion. But what if India defines its mission as achieving in a billion dollars what others have done in 10 billion? One mathematical breakthrough can shift the entire paradigm,” he said.
So far, Indian companies and the government have largely relied on open-source models from tech giants like Google, OpenAI, and Meta. However, some industry experts argue that India should invest in its own AI capabilities. Their concern is that open-source models may not remain accessible indefinitely, potentially creating long-term challenges.
Nadella believes India has a strategic opportunity to innovate. “The design space is there for India to make a smart choice. The last major breakthrough in AI may not have happened yet. We are one breakthrough away from fundamentally altering the architecture of transformers (central architecture of LLMs). India has the talent to lead the next wave of innovation,” he said.
On Tuesday, Microsoft announced that it is doubling down on its commitment to AI in India, with an investment of $3 billion (Rs 25,700 crore) to enhance its cloud computing and AI capabilities in the country. As part of its efforts, Microsoft plans to train 10 million Indians in AI skills by 2030.
The company has also partnered with organisations like RailTel, Apollo Hospitals, Bajaj Finserv, Mahindra Group, and upGrad to harness cloud and AI innovations. Additionally, Microsoft signed an agreement with the ministry of electronics and IT to establish AI centres of excellence and AI productivity labs in India.
Highlighting AI’s transformative potential, Nadella said, “AI can significantly accelerate India’s economic growth. Every year, companies can achieve a 10-15% improvement in operational efficiency, leading to a 100% transformation in five to six years. More tokens per dollar per watt will directly translate to GDP growth”.
