India has the highest AI skills penetration with 3x more AI skilled talent than other countries and over the last 7 years, India has witnessed a 14x growth in individuals skilled with AI, according to a new report by Nasscom and BCG.
While demand for talent in India is expected to grow approx. 15 percent, the market is expected to grow 25-35 percent, indicating the need to focus on upskilling existing talent as well as breaking the linearity of growth in revenues and number of FTEs, states the report.
Tech services firms have begun to actively hire for AI/ML specific jobs: AI leadership hiring increased by c.15 percent while the hiring for AI engineers rose by c. 70 percent in the last year.
While ML, Python and SQL continue to dominate current skills requirements in AI; GitHub, PyTorch and Databricks are also beginning to emerge as important skills.
Investments in AI are booming across the globe with $83 Bn invested in 2023. Key themes emerging:
Data & analytics emerges as the dominant theme ($42 Bn), with GenAI ranking second ($23 Bn). This suggests the expectation in value creation from serving enterprises in setting their data architecture and training data in place, so they can leverage the full benefits of GenAI
Tech ($58 Bn), banking ($27 Bn) and healthcare ($23 Bn) emerge as the top 3 sectors to receive AI funding globally. While data and analytics remains the highest across regions, GenAI investments are largely skewed towards NAMR currently, with c. $30 Bn invested in 2 deals (Nuance, OpenAI). India is seeing players emerge, e.g., Sarvam.ai raised $40 Mn in Series A
Disproportionate investments seen in HR/CRM in Europe and in marketing and advertising solutions in India. 55 percent of investments made by Indian tech products and services investors have been in India itself in the form of strategic bets; Top 3 deals account for c. 58 percent (Jio investing in Glance, Perfios in Karza, and Infosys in SAFE Life Science) of the investment.
Global vantage
The global AI market is expected to grow to $320-380 Bn by 2027 witnessing a CAGR of 25-35 percent with the software and services segment expected to account for c. 88 percent of the market.
GenAI is expected to comprise c. 33 percent of the global AI market by 2027 while ML and Vision will comprise another c. 29 percent.
The financial sector will continue to be the highest contributing sector followed by media and entertainment.
In line with this growth trend, IT buyers expect to increase their spend on AI, cloud and analytics in the forthcoming year; Spend on server infrastructure expected to reduce the most.
While India’s AI market is likely to grow on par with the global market with a skew towards the financial sector as the main spender, the tech sector is also expected to increase spending in India over the next few years.