The ministry of electronics and information technology (MeitY) on Tuesday held a roundtable on how to finance AI start-ups under the ‘INDIAai’ mission, during which venture capitalists, angel investors, and AI start-ups told government officials that giving grants alone do not work, and that funds should be given to entities that are actually working in the AI space, three people aware of the matter told HT on condition of anonymity.
The almost four-hour meeting was chaired by minister of state Jitin Prasada and was attended by MeitY secretary S Krishnan, additional secretary and CEO of IndiaAI Abhishek Singh, group coordinator and IndiaAI COO Kavita Bhatia, and mission director at Atal Innovation Mission Dr Chintan Vaishnav. Venture capital firms, including Blume Ventures, Indian Angel Network, and Bharat Innovation Fund, big tech players including Nvidia, Google and Microsoft, and AI start-ups like jivi.ai and DronaMaps were also present.
One of the people cited above and two others said that government officials were firmly in “listening mode” as they took in the industry’s inputs.
Three questions were on the agenda: first, what is most important in terms of the support that start-ups need; second, how is an AI start-up defined and at what stage should it be financed; and third, what should be the mode of financing (such as capital equity, grants, investments, fund of funds, etc.).
Input from the investors were divided on whether the INDIAai Mission should focus on financing many smaller start-ups with small corpus of money for each of them, or if it should focus on pouring large amounts into larger companies that can prove their worth at a global stage and become “world champions”.
The investors told officials that while there is plenty of money available to invest in AI start-ups, the government needs to focus on ease of doing business, encouraging innovation, and making datasets available. At least two executives told officials during the discussion that without datasets and without easy regulation, there can be no innovation in artificial intelligence.
Investors also asked the government to make the INDIAai Datasets Platform available as soon as possible. This platform will provide researchers and start-ups access to non-personal data from government ministries and is one of the seven pillars of the INDIAai Mission. The idea is to make clean, domain-specific data available to start-ups to train their models.
Investors also mentioned that compute for AI is a problem in India and needs to be subsidised. In July, at the Global IndiaAI Summit, Singh had said that the government had earmarked about ₹5,000 crore to provide over 10,000 Graphics Processing Units (GPUs) as part of its ₹10,000 crore-plus IndiaAI Mission. He had said that the government planned to subsidise access to computing power rather than own the infrastructure outright. He explained this aimed to help researchers and start-ups access compute at lower costs, enabling more experimentation and scaling.
On August 16, MeitY had issued a request for proposals to empanel consortium of entities that would offer their compute power via cloud to academia, MSMEs, start-ups, researchers, public sector entities and other entities approved by IndiaAI. Each consortium can consist of data centres, or cloud service providers, or system integrators with experience in cloud implementation. The RfP requires all AI services to be delivered from data centres within India, and requires data uploaded to the cloud platform to be localised within India, that is, it cannot be sent outside India in any form (anonymous/pseudonymous/encrypted). It also requires the cloud platform to be able to provide at least 1,000 AI compute units.
The deadline to submit applications is September 6.
