GenAI likely to add $1.2-1.5 tn to India's GDP by 2030: EY report

Generative AI (GenAI) has the potential to add a cumulative $1.2-1.5 trillion to India's GDP over the next seven years, according to a report by global consultancy firm EY published on Sunday.

The report, titled 'AIdea of India: Generative AI's potential to accelerate India's digital transformation,' states that in 2029-30 alone, GenAI could contribute an additional $359-438 billion to India's GDP.

This report comes at a time when technology giants like Google, Microsoft, Amazon, and IBM are in a race to build the most advanced enterprise-grade generative AI solutions and tools. Earlier this month, Google launched its largest AI model, Gemini, in an attempt to surpass OpenAI's GPT-4 and Meta's Llama 2.

Read more: Google launches its ‘most capable’ multimodal AI model Gemini

These developments converging, along with the entry of data centre players and chip makers like Intel and NVIDIA into the market, building AI capabilities on chipsets, is driving the enterprise adoption of the technology .

 The survey, conducted on 200 C-suite participants from various sectors, including technology, media and entertainment, financial services, government, health, retail, and manufacturing, revealed that nearly two-thirds of the organizations surveyed acknowledged the impact of GenAI on their businesses. 

However, 75% of Indian businesses have shown limited preparedness to capitalize on GenAI. While more than half (52%) of the organizations surveyed believe that the skills gap is a challenge in harnessing the potential of GenAI for businesses, around 42% of respondents found the availability of unclear use cases to be another hurdle.

Read more: Many workers using gen AI without training, employer approval

The report suggests that implementing measures such as enabling access to training data and marketplaces, deploying GenAI systems as Public Goods, securing critical digital infrastructure, and ensuring access to talent and public funding for R&D will help foster GenAI innovation. 

On the data privacy front, the report highlights that 36% of organizations see data privacy as the single most important risk of GenAI, followed by hallucination or fabricated answers (24%), biased responses (21%), and cybersecurity (16%).

Furthermore, 75% of organizations stated that customer engagement was the segment most influenced by generative AI. Additionally, 73% of organizations prefer partnering with external tech providers for GenAI implementation.

Read more: Cloud skills shortage hits hybrid cloud and Gen AI progress: Report

"Organizations are swiftly adopting an AI-first approach to digital transformation, aiming to enhance customer engagement, increase productivity, and achieve greater agility in delivering digital capabilities using innovative foundation models and AI-first solutions," said Mahesh Makhija, Technology Consulting Leader at EY India. "

Although in the early stages, there is a tremendous sense of optimism in AI, and to realize its full potential, India must significantly elevate its efforts in terms of increased government role in development and deployment," he added.

The report further notes that GenAI can act as a catalyst for economic growth, as governments worldwide actively pursue measures to promote and regulate AI. Implementing measures like enabling access to training data and marketplaces, deploying GenAI systems as Public Goods, securing critical digital infrastructure (through the rollout of 5G, data centers, access to specialized chips, and AI-specific compute infrastructure), and ensuring access to talent and public funding for R&D will help foster GenAI innovation, the report suggests.

Regarding adoption, the public sector is likely to use GenAI systems for the public good, aligning with the National Strategy for Artificial Intelligence announced in 2018, which emphasizes an inclusive "AI for ALL" approach impacting sectors such as education, healthcare, agriculture, and smart cities, among others. EY experts suggest that gaining access to data and marketplaces, securing digital infrastructure, and facilitating talent access and public funding for R&D can enhance GenAI innovation in India.

Following the footsteps of the UAE and EU, EY experts recommend, India could also consider developing an open-source ecosystem for basic algorithms and training datasets to assist Indian entities and start-ups in developing their own GenAI products and accelerating indigenous innovation.