India’s AI Sector : India’s Artificial Intelligence (AI) market is poised for remarkable expansion, with a projected 25% Compound Annual Growth Rate (CAGR), reaching approximately $17 billion by 2027. This surge is fueled by a confluence of factors, including increased enterprise tech spending, a burgeoning AI talent pool, and escalating investments in the sector.
India’s AI Sector currently
The nation currently boasts the second-highest installed talent base, with 420,000 employees engaged in AI-related job functions. India’s AI skills penetration is unparalleled, with three times more AI-skilled talent compared to other countries, as per the Nasscom-BCG AI Acceleration Survey.
Over the last seven years, India has experienced a staggering 14-fold growth in AI-skilled individuals, placing it among the top five nations in AI skill development. As AI investments continue to rise, the demand for AI talent in India (India’s AI Sector) is projected to grow at a robust 15% CAGR until 2027.
Indian tech companies are at the forefront of this AI revolution, expanding their offerings beyond traditional IT and business process management to include AI-driven analytics, intelligent automation, and personalized customer interactions. These companies are not merely adopting AI; they are reshaping their service portfolios, delivering enhanced value to clients, and setting new industry standards, stated Nasscom President Debjani Ghosh.
To accelerate this transformative journey, substantial investments are needed in AI skilling, along with a focus on ethical and secure AI development practices and governance frameworks. A shift towards a human-centered approach, prioritizing transparency and human oversight, is crucial, added Ghosh.
The technology industry in India (India’s AI Sector) has witnessed over 15% growth in AI/ML jobs in the past 12 months, with positions like AI engineers experiencing a remarkable 67% year-on-year growth. Recognizing the pivotal role of human capital in the AI journey, leading firms are heavily investing in upskilling and reskilling their workforce in AI and related technologies, with some allocating $1 billion over the next three years for this purpose.
India’s exponential growth in the AI market underscores its indispensable role in driving global innovation. This is evident in investments within the country, diverse use cases across industries, and the rapid growth of AI talent. Indian companies are not only keeping pace with AI growth but are also establishing dynamic and evolving Centers of Excellence (CoE) to lead the AI agenda, emphasized Rajiv Gupta, MD and Senior Partner at BCG.
Globally, AI investments have witnessed a 24% CAGR growth since 2019, reaching close to $83 billion in 2023. The majority of these investments by Indian tech services and homegrown product players are directed towards digital content, data analytics, and supply chain innovations, constituting about 93% of the total investments.
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