The findings of Inc42’s latest report also suggest that startups have been more proactive in terms of adopting AI technology, including GenAI, as compared to traditional players
Only 30-40% of GenAI proof of concepts by global capability centres (GCCs) and 15-20% by large domestic companies in India are progressing to production
While India’s large-scale enterprises have been slower to adopt GenAI compared to global peers, the tide is gradually shifting
At a time when AI adoption is on the rise around the world, India’s large-scale enterprises seem to be trailing behind their global peers. As per Inc42’s The Rise Of India’s GenAI Brigade, Report 2024, 75% of startup investors believe that most large-scale enterprises in India are struggling to convert their AI use cases from proof of concept to organisation-wide deployment.
While this may appear contrary to the image of Indian IT giants said to be riding the GenAI wave, it is only true to some extent. Well, companies like TCS, Wipro, Infosys, and several large banks have indeed adopted AI and GenAI technologies for various internal and external purposes, but their adoption is still slower compared to others.
The findings of Inc42’s latest report also suggest that startups have been more proactive in terms of adopting AI technology, including GenAI, as compared to traditional players.
In addition, only 30-40% of GenAI proof of concepts by global capability centres (GCCs) and 15-20% by large domestic companies in India are progressing to production. In contrast, 66% of India’s leading unicorns have started integrating GenAI into their offerings. In fact, GenAI adoption has truly become a new normal for Indian startups.
As part of a survey done by Inc42 that asked more than 50 VC investors about the tech readiness of their non-GenAI portfolio startups in GenAI adoption, 43% said that AI/GenAI is now a key part of their product and service roadmap.
Meanwhile, 27% of these VCs also said that their non-GenAI portfolio startups are already implementing the technology.
Why Are Indian Enterprises Slow In AI Adoption?
It is a known fact that India has been a little late to jump on the GenAI bandwagon — whether it is about companies building foundational models and applications or implementing the tech.
Large enterprises, with their larger teams, established processes, and stricter compliance requirements, naturally face more challenges when adopting new technologies, and this isn’t unique to GenAI.
Commenting on the matter, Vipul Patel, partner (seed investing) at IIMA Ventures, said that Indian enterprises have historically lagged behind their global counterparts in the adoption of technology for workflows during digitisation, cloud migration, and SAAS usage as well.
“Even in the case of GenAI, since the adoption largely depends on the cloud migration and digital transformation of enterprises, Indian enterprises continue to witness a certain lag,” Patel added.
Sahil Chopra, VP of growth and marketing at Inflection Point Ventures, too, noted that enterprises have inherent challenges such as legacy systems, talent shortages, and infrastructure constraints, which have hampered adoption.
However, Chopra believes these challenges are now being addressed via collaborative efforts in upskilling, modernisation, and strategic investments.
“Indian firms are progressively preparing to adopt the tech, demonstrating their distinctive ability to innovate while facing hurdles with resilience… The rising recognition of GenAI’s revolutionary potential is causing a shift in thinking, aided by government measures aimed at promoting AI use and a healthy startup sector,” he added.
GenAI adoption in enterprises is gaining momentum — slowly but surely. TCS, which uses and develops AI and GenAI-based applications for its clients, has recently launched several platforms to serve various sectors.
One of its latest innovations is TCS AI WisdomNext, a GenAI aggregator platform designed to help organisations quickly adopt next-gen technologies at lower costs, all while staying compliant with regulatory guidelines.
Reliance is also developing a suite of infrastructure-level AI tools under the brand name JioBrain to allow industry and consumer adoption of the technology.
But Is The Trend Shifting?
GenAI’s largest enterprise use case currently lies in conversational bots, particularly in sectors like BFSI, ecommerce, and telecom, where there is significant demand for customer support.
For instance, Ganesh Gopalan, the cofounder and CEO of Gnani.ai, which is focussed on transforming the customer experience provided by enterprises, claims that its AI solutions help more than 150 enterprises achieve a revenue impact exceeding $6 Bn.
“I have observed that Indian enterprises aren’t just keeping pace with global enterprises in GenAI adoption but exceeding them in many ways. They seem to be more readily embracing GenAI solutions, likely driven by a keen understanding of the cost efficiencies and productivity gains these technologies offer,” Gopalan said.
According to the founder, this accelerated adoption in the Indian enterprise ecosystem in recent days is due to a modernised technological and infrastructure landscape.
“Many global enterprises are grappling with legacy systems, while Indian enterprises have undergone a significant digital transformation in recent years,” he added.
AI-powered equity investment platform InvestorAI, which works with top domestic broking firms, including HDFC Securities, Geojit, JM Financial Services, and Axis Securities, believes that India is better placed than most in terms of businesses adopting GenAI.
So, Will Enterprise Use Cases Rise Soon?
The answer would be unequivocally affirmative. While India’s large-scale enterprises have been slower to adopt GenAI compared to global peers, the tide is gradually shifting.
Notably, any tech business falling behind in its adoption might also lose relevance in this swiftly changing world. Moving on, with advancements in digital transformation, the rise of AI-driven solutions, and increasing recognition of GenAI’s potential, Indian enterprises have no option but to catch up to their global peers.
Industry experts believe that with regulations around GenAI improving, ethical AI taking centre stage, and the launch of varied applications to solve niche industry-specific or department-specific problems, Indian enterprises will only accelerate the deployment of technology.
Perhaps this promising opportunity is also the reason why 70% of GenAI startups are focussed on building solutions for enterprises today instead of consumer applications, as suggested by Inc42’s report.
As of now, the future looks promising, with significant opportunities for innovation and growth in the GenAI space, especially as the demand for personalised, enterprise-ready applications continues to rise.
[Edited By Shishir Parasher]
