India’s AI Market To Reach $17Bn By 2027

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India has seen a 15% growth in AI/ML jobs in the last 12 months, with positions like AI Engineers growing at 70% YoY. 

India’s artificial intelligence market is projected to touch $17 billion by 2027, growing at an annualised rate of 25-35%. India ranks fifth globally in AI investments, receiving around $4 billion in 2022 -23.

India AI market

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The global AI market is projected to reach between $320 billion and $380 billion by 2027, with Generative AI (GenAI) expected to contribute approximately 33% to this growth. The financial sector is anticipated to be the largest beneficiary of this expansion.

Various factors have boosted this growth. Improved enterprise data engineering practices and use-case-specific model training are enhancing the effectiveness and applicability of AI solutions. Hardware Original Equipment Manufacturers (OEMs) are designing more powerful AI chips and processors to support the increasing computational demands of AI applications.

Model and algorithm fine-tuners are working to optimise the need for compute power, making AI more efficient and accessible. The development of user-friendly, natural language interfaces is making it easier for users to interact with complex data and analysis backends.

Around 55% of investments made by Indian Tech Product & Services investors are in India, with a focus on Data & Analytics, Digital Content, and Generative AI. 68% of investments made by Indian Tech investors are done through mergers and acquisitions, compared to approximately 75% for global Tech investors.

Jio Platforms invested in Glance Digital to enable personalised content via AI on Jio phones’ lock screens.  Infosys acquired BASE Life Science to assist global pharmaceutical companies in analysing data related to clinical trials, drug discovery, patient’s health, etc., using AI. Perfios acquired Karza Technologies to build a one-stop-shop by leveraging Karza’s expertise in fraud prevention through superior data engineering.

India has the second-highest installed talent base, with approximately 420,000 employees working in AI job functions. It has the highest skills penetration, with about three times more AI-skilled talent than other countries. Over the last seven years, 14x growth has been seen in individuals skilled in AI , placing India among the top 5 nations.

According to the BCG and Nasscom joint report, India has seen a 15%+ growth in AI/ML jobs in the last 12 months, with positions like AI Engineers growing at 70%+ year-over-year. The demand for AI talent in India is expected to grow at a 15% CAGR until 2027 to serve the AI market.

Investments in AI globally stand at $83 billion in 2023, growing at approximately 25% CAGR. ML, Python, and SQL dominate the current skills requirement in AI, with a few generative AI skills gradually emerging.  AI employees in large Tech Services firms are starting to pick up skills in Github, PyTorch, and Databricks more actively.

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