The Cabinet on Thursday approved the India AI Mission with an outlay of Rs 10,372 crore for five years to encourage AI development in the country, Union Minister Piyush Goyal said. The approved corpus will be used to build a high-end scalable AI ecosystem in public-private partnership mode.

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"With an outlay of Rs 10,372 crore, one very ambitious India AI Mission that will encourage AI segment and ongoing research in this field...Has been approved by the cabinet," Goyal said.

The mission will be implemented through the IndiaAI Independent Business Division (IBD) under Digital India Corporation (DIC).

The minister, briefing reporters after the Cabinet meeting, said supercomputing capacity, comprising over 10,000 GPUs (graphics processing unit), will be made available to various stakeholders for creating an AI ecosystem.

The demand for GPU-based servers has increased as they can process data at a higher speed compared to CPU-based servers.

Startups, academia, researchers and industry will be given access to the AI supercomputing infrastructure established under the India AI Mission, Goyal said.

Minister of State for Electronics and IT Rajeev Chandrasekhar on social media platform X said that AI is poised to be the kinetic enabler for India's digital economy.

"This program will catalyse India's AI ecosystem and position it as a force shaping the future of AI for India and the world. AI is one of the greatest inventions of our time, India will play a major role in shaping its future. That is ModiKiGuarantee," Chandrasekhar said.

The minister said that the mission will benefit states like Kerala, which, for years, missed the bus in creating a robust tech ecosystem.

An India AI Innovation Centre (IAIC) will be set up under the mission. The IAIC will be a leading academic institution, ensuring streamlined implementation and retention of top research talent.

Funds approved by the Cabinet will enable IAIC to spearhead the development and deployment of foundational models, with a specific emphasis on indigenous Large Multimodal Models (LMMs) and domain-specific models, leveraging edge and distributed computing for optimal efficiency.

The financial outlay will fortify the India AI Startup Financing mechanism, facilitating streamlined access to funding for budding AI startups and catalysing their journey from product development to commercialisation.

"The proposal also includes funding provisions for industry-led AI projects aimed at fostering social impact, propelling innovation and entrepreneurship," an official statement said.

A National Data Management Office will be set up under the mission that will coordinate with various government departments and ministries to improve the quality of data and make them available for AI development and deployment.

Working groups formed by the government on Artificial Intelligence (AI) have recommended setting up a three-tier compute infrastructure, comprising 24,500 Graphics Processing Units (GPUs).

At present, the US and China lead in computing infrastructure required for the development of AI technology.

According to the Top 500 website, top-performing supercomputers are located in the US, Europe, Japan, China, South Korea, and Saudi Arabia, where purchasing power parity is high.

As per the Top 500 list issued in November 2022, China had 162 supercomputers, followed by the US with 127, while India had three.

According to industry estimates, NVIDIA dominates the GPU market with about 88 per cent market share and there is a lag of 12-18 months in getting GPUs from the company due to its high demand across the globe.

The AI working groups have recommended setting up best-in-class AI computing infrastructure at five locations with 3,000 AI Petaflops computing power, with 15 times more capacity than the highest capacity installed at present.

The groups have recommended setting up an Inference Farm (2,500 AI PF) and Edge Compute (500 AI PF) systems.

The government has already spent Rs 1,218.14 crore in the last eight years to set up 24 PetaFlops compute capacity under the National Supercomputing Mission.

In the race to develop AI capacity, Microsoft provided Open AI with a USD 1 billion investment in 2019 and a USD 10 billion (about Rs 82,000 crore) investment in 2023.

IBM alone invested USD 6.5 billion (about Rs 5300 crore) in research, development and engineering to innovate in the field of AI, hybrid cloud and emerging areas, such as quantum in 2022.