Artificial intelligence is no longer a niche technology in India according to a new Bain & Company report with 80 percent of enterprises polled using at least one AI model.
From Buzz to Reality: The Accelerating Pace of AI in India, a report based on a survey of nearly 150 providers and 350 enterprises, will be released on Tuesday.
This was achieved in partnership with Microsoft and the Internet and Mobile Association of India (IAMAI). Technology solution providers are driving AI adoption in India, with 64 percent incorporating AI/ML into many of their products, compared to 56 percent of their global counterparts. However, most organizations are still in the early stages of AI adoption, with only a few use cases implemented.
Firms in India have seen a significant uptick in their interest in adopting AI to drive business outcomes. However, there is plenty of hype and hyperbole around what constitutes AI—companies are not shy about making AI claims around systems that are rules-based at best, the study found.
“While attribution of value to AI is challenging given the embedded nature of AI with the software, 85% of executives from early adopters feel it has driven substantial value. The level of value-added is consistently high, especially among the more mature organizations. For example, fintech players have been able to reduce fraudulent transactions by up to 40%, pharmaceutical manufacturing companies reduced reject rates by up to 20% and D2C companies have seen an enhancement in conversion rates by 2 – 3% through personalization. Such organizations spend ~0.4%–0.7% of their revenues on AI/ ML and realize an ROI of about 2–4x,” said Sudheer Narayan, Partner, Bain & Company and co-author of the report.
AI adoption for enterprises is highest in communication, over-the-top (OTT), and gaming (55 percent); technology (48 percent); and financial services (39 percent ). More than 90% of digitally native companies in CPG and retail, as well as financial services, have demonstrated AI/ML adoption.
Despite having a small share of the global market (i.e., 1%), India produces 16% of global AI talent, placing it among the top three contributors in the world. The talent equation in India will only improve in terms of quantity, but a clear distinction will emerge between data engineers, data scientists, and product managers.
In the next three years, 49 percent of businesses intend to increase the proportion of ‘build,’ while 29 percent intend to increase the proportion of ‘buy.’ Providers are also inclined to build their models with third-party assistance or open-source tools/services.