Even as the country has accelerated its investments in artificial intelligence (AI), Mohandas Pai, investor and former chief financial officer (CFO) of Infosys, said there is still a need for established, legacy businesses to invest heavily in the emerging technology, failing which they risk losing their competitive edge to foreign companies.
Speaking during a session at the fifth edition of the India Global Innovation Connect in New Delhi, Pai said: “We need the top 10 Indian companies to put serious money to work because I do believe that AI will be a threat to their businesses. They’re all worried and they have got to put a lot more money. We’ve got to fund a lot more innovation.”
On the country’s investment in research and development (R&D), while the government currently spends about 0.7 per cent of gross domestic product (GDP), Pai said the spending should rise to nearly 3-4 per cent. He added that the private sector also needed to increase its investment in R&D.
Pai said that while several horizontal AI tools and applications already exist globally at scale, vertical AI could potentially emerge as a more viable bet for the country. “The big companies like TCS, Infosys and others will have to put money into vertical AI. While these companies could deploy a couple of billion dollars each into building broad-based AI platforms, they cannot compete with dominant US tech giants in that space,” Pai added.
Vertical AI refers to AI systems built for a single industry or domain, while horizontal AI is pre-trained for a wide range of tasks across multiple fields.
According to Pai, significant capital needs to flow into the IT sector; otherwise, India would have little to show for its AI ambitions. “The key vision for India is $250 billion in IT services exports and possibly in the next four to five years, we could be spending $40-50 billion on brokerage for building this big AI base in America.”
The writers are 2026 batch Business Standard-Rahul Khullar interns.
