The brutal fact is that every other attempt to give India’s hundreds of millions of young people the skills they need to compete has failed. — Bloomberg
EVERYONE is looking for the next big artificial intelligence (AI) bet.
They’re searching for energy-rich places that can run data centres cheaply, for bottlenecks in the semiconductor supply chain that will earn massive profits, or for companies that might own the next breakout algorithm.
Usually, India doesn’t feature in these conversations. It isn’t going to be a chipmaking superpower any time soon. And, although a couple of big data-centre projects have been announced, high energy costs and land scarcity limit its ambitions.
And yet India may be the biggest, safest bet in the age of AI. Not because it will build the models, but because it will use them.
The large language models players already suspect this. In recent months, three companies have rolled out free access to their paid tiers exclusively in India.
OpenAI Inc’s lightweight ChatGPT Go plan will be available at no cost to Indians for a year; Alphabet Inc’s Gemini Pro will be provided to every single one of Reliance Jio Infocomm Ltd’s 505 million subscribers for 18 months; and Perplexity AI Inc will offer its Pro version to Bharti Airtel Ltd’s 350 million users.
That two of the three are going with telecom providers is partly to build scale.
Nobody gives you numbers like India does. And young Indians are particularly ferocious adopters of technology.
The telcos, for their part, are always looking for products to bundle with their subscription plans.
But some analysts have pointed out that it’s different this time: Instead of an entertainment package, they’re selling their AI add-ons as a utility.
We are on the cusp of a planetary-scale social experiment: What happens when you push free, unlimited, cutting-edge AI onto a billion-plus peoples’ phones?
Indian officials know what answer they’re hoping for. This might be how the country finally breaks out of the low-skill, low-productivity equilibrium it has been trapped in. Growth numbers look impressive.
But they’re driven by a few high-output sectors; the vast majority of people work for themselves or for informal enterprises, and according to the International Labour Organisation are only half as productive as the average.
Last month, the government think tank NITI Aayog argued in an AI-focused report that it could triple the productivity of India’s informal workers in the next decade, taking it from US$5 an hour to US$15 an hour.
The officials said that their calculations showed widespread adoption would add between US$500bil and US$600bil to India’s output by 2035.
New Delhi is an upbeat town, and this figure is almost certainly exaggerated by the most flattering possible assumptions.
The brutal fact is that every other attempt to give India’s hundreds of millions of young people the skills they need to compete has failed.
And, as my colleague Andy Mukherjee has argued, entry-level white-collar jobs are as much at risk in India as they are anywhere else.
But official optimism about this technological transformation isn’t entirely unfounded. — Bloomberg
Mihir Sharma is a senior fellow at the Observer Research Foundation in New Delhi, he is author of Restart: The Last Chance for the Indian Economy
