Intel and IDC have unveiled a joint report assessing the Artificial Intelligence (AI) maturity level across eight markets, including India. The report highlighted that India’s AI spending is forecasted to experience the swiftest expansion among the examined markets, with a projected Compound Annual Growth Rate (CAGR) of 31.5 per cent from 2023, reaching $5.1 billion by 2027.
This comprehensive assessment, encompassing enterprise, government, and socio-economic dimensions, offers valuable insights into India’s AI landscape and its trajectory in the global AI revolution. According to the report, India, along with other countries like Australia, Indonesia, Japan, Korea, Malaysia, Singapore, and Taiwan, has been placed in specific stages in terms of overall AI maturity.
Despite notable interest and growth in AI utilisation, India and Taiwan are currently classified as an AI Practitioner (stage 2), as per the IDC study. “Stage 2 is characterised by tactical AI and innovation initiatives defined by reactive interventions through technology, data, processes, and people to accomplish shorter-term objectives. There are some successful use cases but not at scale,” the report noted.
However, in terms of other countries, Indonesia and Malaysia are at stage 1 (AI Explorer), Australia, Japan and South Korea are at stage 3 (AI Innovator) and lastly, Singapore is at stage 4 (AI Leader).
AI Adoption & Govt Role
India’s strategic position as a global AI leader is reinforced by its robust developer community and skill penetration, poised to surpass even the US. With approximately 20 per cent of the world’s data and AI talent, India stands at the forefront of AI innovation.
Investments in AI for the years 2024 and 2025 will prioritise the development of AI infrastructure, laying the foundation for high-value use cases that promise transformative impact in the future. As per the report, the BFSI (Banking, Financial Services, and Insurance) and manufacturing sectors are emerging as the top spenders in India. The manufacturing industry, in particular, is anticipated to play a pivotal role in driving the country’s economic expansion, particularly within sectors such as electronics and consumer goods.
India strongly outperforms the Asia-Pacific average in the government dimension, propelled by the current government’s pro-AI stance. Approximately $30.7 million is earmarked in FY 2024-25 to establish three centres of excellence in AI focusing on agriculture, health, and sustainable cities. These initiatives aim to address defined needs within these industries and develop innovative AI solutions.
The report also highlighted that key initiatives like the National Strategy for AI, Making AI Work for India, and the INDIAai portal stimulate R&D and encourage AI adoption in critical sectors such as healthcare, education, agriculture, and manufacturing. The government is also committed to offering AI training programs and nurturing a supportive ecosystem for AI startups through both national and state-level funding mechanisms.
Challenges and Opportunities
Despite the promising growth trajectory, challenges in AI deployment persist. Only 6 per cent of surveyed organisations view their AI adoptions as central to their competitiveness, highlighting the need to address issues such as infrastructure development, regulatory compliance, and change management.
The report also noted that because of India’s large population and relatively low GDP per capita, the per capita investment in AI is low, at only $4.77 per $1,000 of GDP between 2019 and 2023; by comparison, Singapore invested $15.01. This is a critical aspect in India’s socioeconomic status, highlighting the necessity for more investment to enhance national AI maturity. Furthermore, many Indian AI talents have gone to nations with greater wages, thus, hindering future AI progress.
However, it is believed that with strong government support, a vast talent base, and many enterprises proactively implementing AI, India is poised to reap tremendous benefits. Santhosh Viswanathan, Vice President and Managing Director, India Region told News18 that AI is becoming as essential as the Internet for businesses worldwide. Just as every company now relies on the Internet, AI is poised to have a similar impact, touching every sector.
As per Viswanathan: “We would be one of those places that can go adopt AI everywhere…In India, the potential for AI adoption is particularly promising due to the country’s extensive digitisation. India’s robust digital infrastructure, exemplified by the India Stack, provides a solid foundation for AI implementation at scale. And India has the opportunity to harness its vast data resources to drive innovation and improve lives.”
Furthermore, he said that as Intel works to democratise AI access across India, the goal is to empower organisations of all sizes to leverage AI effectively, ultimately enhancing customer experiences and driving societal progress.
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