India seeks AI rewards

In the article by me carried by this newspaper last week, I recounted a conversation I had with Field Marshal Ayub Khan a few months before he died of a heartache at his residence in foothills of Islamabad. He was the first military president in Pakistan's history and was followed by three other. He lamented the fact that he didn't opt for American help to build technology infrastructure as was done by India. Instead, he asked for the American help in providing Pakistan economists with rich experience in development. The result was an agreement Pakistan signed with Harvard University's Development Advisory Service, the DAS.

With that as the approach, Pakistan has fallen way behind India in making the leap in advanced technologies. It is relying on China to make investments in developing technologies need by modernising economies. China is into the second phase of CPEC with investments not only in the modernisation of Pakistan's communication network but also taking advantage of the fact that the country has one of the youngest populations in the world. This is different from China which, because of the fall in human fertility, has a population that is declining in size and is fast ageing.

With Pakistan and China on the opposite side of the demographic spectrum – with China needing young people to run advanced technologies – it should be possible for the two countries to work together to feed youth to the rapidly developing sectors of high technologies. China could set up training centres on the Pakistani side of the border that could provide the young people China needs. Graduates from these schools could take up short-term assignments in China. In many ways, including the demographic trends, India and China are different.

New Delhi is now working hard to become a leader in AI-related activities. It hosted the fourth annual AI summit that began at Bletchley Park in Britain in 2023. The second meeting was held in Seoul and the third in Paris. The main topics of the earlier meetings were motivated by fears expressed in doomsday scenarios like the prospect of AI's turning sentient overlord and sought to devise regulations to make it safer. India's version is focused on announcements about business deals and billions of investments as well as entrepreneurs touting clever fixes to real world problems. The event promised to be a global coming-out party for India's AI aspirations.

The New Delhi summit had more than 300 exhibitors and 500 sessions sprawled across 120 acres of the Indian capital city. The organisers expected 250,000 visitors including President Emmanuel Macron of France and President Luiz Inacio Lula Silva of Brazil. Indian Prime Minister Narendra Modi was the host who opened the meeting with a statement that promised "giving AI open sky and keep the command in our hands". The prime minister's allies distinguished India's AI potential from the American approach which has benefitted mainly the private sector and China's which strengthens state control. Ashwini Vaishnaw, the cabinet minister in charge of India's AI policy, said $200 billion worth of AI investment was expected in India, much of it flowing from abroad.

The American AI company, Anthropic, presented at the New Delhi summit by its chief executive, Dario Amodei, announced a deal with Infosys, a giant among India's first generation tech firms. The two companies said they would integrate the services they offered to the clients such as regulatory compliance reporting and precision engineering. The Indian firms, including Infosys, had been battered for months by a stock sell-off on fears that AI threatens its business moved.

OpenAI, the large American firm which has pioneered AI engineering, announced a collaboration with Tata Consulting Services to train more Tata Consulting employees to apply AI tools in their work. Claude, Anthropic's main large language model, already counts India as its second-largest market, accounting for 6 per cent of its worldwide usage. Such AI systems learn by digesting vast amounts of words and images, making India – with its large population and numerous languages – an ideal place to do AI-related business. Open AI sees an enormous market in India. Amitabh Kant, a former government official, said Indian users now shared 33 per cent more data with OpenAI's ChatGPT than Americans did.

India consumes more data than any other country, developed or developing. The companies running so-called frontier AI models and that build data centres and the infrastructure they require are scrambling to keep up with demand. This year OpenAI will set up an office in India, its first in the country. Sam Altman, the founder of OpenAI, told a US Congressional Committee that the future of artificial intelligence was contested between an American-led democratic AI, and one being developed by China's ruling Communist Party.

Other large AI firms are also eyeing India as an opportunity to be tapped. Investing in India is one way of challenging China which under the leadership of President Xi Jinping is having the state invest heavily in advanced technologies including AI.

Despite some setbacks at the Delhi Summit – such as the cancellation of the speech by Bill Gates and the cancellation of the visit of Jensen Huang, the founder of Nvidia – there were heaps of deals featuring big players. Blackstone, the private equity firm, put $600 million into Neysa, an Indian cloud services provider. Each of India's three dominant industrial companies – Adani Group, Mukesh Ambani's Reliance and Tata – are pouring money into new data centres. The Adani Group pledged $100 billion to construct data centres powered by clean energy by 2035.

Across India, there is widespread anxiety about whether India's students are able to compete for jobs in an age of AI with technology changing so rapidly. The founder of Zeko, a startup at the Delhi Summit, admitted that AI was making harder for many Indians to enter the work force. That was the case for those trained in conventional tech jobs but don' have the skills needed by activities such as AI. Renee Wadhwa, a 19-year-old computer science student in the central Indian city of Bhopal, said her syllabus was completely outdated. For graduates in her programme, she said, it is harder to find jobs. "The pay packages are the same, but there are fewer of them," she added. The Indian state needs to step in to prepare its youth to take advantage of developments such as AI.