According to a new Bain & Company report, artificial intelligence is no longer a niche technology in India, 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 accomplished 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.
AI has sparked a significant increase in interest among Indian businesses in using it to drive business outcomes. However, there is a lot of hype and hyperbole surrounding what constitutes AI—companies aren’t afraid to make AI claims about systems that are, at best, rules-based, according to the study.
While attribution of value to AI is difficult due to the embedded nature of AI in software, 85 percent of executives from early adopters believe it has driven significant value. Value-added is consistently high, particularly among more mature organizations.
Personalization has enabled fintech companies to reduce fraudulent transactions by up to 40%, pharmaceutical manufacturing companies to reduce reject rates by up to 20%, and D2C companies to increase conversion rates by 2 to 3%.
Such organizations spend 0.4 percent to 0.7 percent of their revenue on AI/ML and see a 2-4x ROI, said Sudheer Narayan, Partner at Bain & Company and report co-author.
AI adoption for enterprises is strongest 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.
In the upcoming years, their reliance on cloud platforms for ready-made models and packaged solutions is anticipated to decline (from 36% of the AI feature/use cases in 2019 to a projected 29% in 2023).
87% of businesses expect to increase their annual AI spending by more than 10%.
In the next three years, 94 percent of AI researchers and adopters expect to increase their use of AI/ML-based applications.
