85 pc of AI developers rely on public cloud, 74.5 pc see enough choice among providers: Report

New Delhi, Aug 19 (AHN) India’s artificial intelligence ecosystem is expanding rapidly, with 85 per cent of AI developers relying on public cloud infrastructure and nearly three-fourths saying they have sufficient choice among compute providers, a report said on Wednesday.

The data compiled by public policy think-tank The Dialogue, titled “Competition, Innovation, and Market Structure in India’s AI Ecosystem: An Empirical Assessment,” examines competition, market dynamics and adoption across India’s AI value chain. It draws on the experiences of AI startups and developers, businesses using AI and consumers.

According to the report, 74.5 per cent of AI developers believe there is sufficient choice among compute providers, suggesting that access to providers is not currently a widespread competition constraint. However, the study flagged compute affordability as an area that will require continued attention as AI adoption expands.

The report also highlighted the growing importance of open-source technology in India’s AI ecosystem. As many as 96.2 per cent of AI developers said they rely on open-source tools, while 62.2 per cent reported a high level of reliance. More than 79 per cent of developers view open-source models as at least a partial substitute for proprietary models, indicating that open-source options are providing a competitive alternative and potentially lowering barriers for startups and downstream developers.

Data remains another key challenge for the sector. About 63.2 per cent of AI developers identified data standardisation as their biggest data-related hurdle, while only 15 per cent said government-held datasets were readily accessible. The findings suggest that improving the usability and accessibility of data could be as important as increasing the volume of datasets available to AI developers.

The availability of skilled talent is also emerging as a significant competitiveness issue, with 47.2 per cent of AI developers identifying talent availability as a major barrier. The report said strengthening AI skills, workforce development and talent mobility would be important to sustain the sector’s growth.

AI adoption is also translating into tangible benefits for businesses. About 85 per cent of businesses surveyed reported a positive impact from AI, with 61 per cent citing improved decision-making and 55 per cent reporting faster delivery. Around 67 per cent said the cost of AI was reasonable relative to the benefits generated.