Deeptech Experts on ChatGPT and the Future of AI in India Generative AI, IP creation, IP creation and the future of deeptech were some of the topics discussed as part of a session at the recently concluded Entrepreneur India's Tech & Innovation Summit 2023 in Bengaluru
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
The lines between tech and deeptech are fast blurring across the world and India is no exception. Deeptech is very much a part of our everyday lives today. Every business leverages advanced technologies like artificial intelligence (AI), machine learning, the Internet of things (IoT), big data and robotics. This has pushed the industry to the fore. According to news reports, India has more than 3000 deeptech startups, catering to different industries and consumers. Besides this, most startups today use deeptech in some aspect or the other.
Many global macro conditions have also come as a blessing for India's deeptech industry. To quote an example, the pandemic has increased tech adoption and has resulted in an increased awareness towards sustainability. This has opened up doors for more deeptech use cases in the electric vehicle (EV) and climate change sectors. Many deeptech startups are thus able to find the right product-market fit in India today.
However, despite the boom, we have been seeing a slowdown in funding for the sector. Even before the inception of funding winter, we didn't see many Series B and above funding. Will this change in the medium to long term?
We asked this and much more to some deeptech experts at the recently concluded Entrepreneur India's Tech & Innovation Summit 2023 in Bengaluru and below is what they said.
You can also watch the entire video by clicking on the image above.
Funding in deeptech
"Deeptech companies require a lot of funding, even ChatGPT got funded by a consortium of investors. But what we saw in the COVID era were astronomical valuations, and right now, the investors are more cautious towards profitability, unit economics and operational profitability. So, that's why we are getting some blurry picture out there when we are saying that the investments are going less in deeptech companies," said Vyom Bhardwaj, founder, Muoro.io.
M&As and IPOs are also very uncommon in the sector. Will this change any time soon? "The macroeconomic challenges are certainly not favorable. So, investors are parking their funds in risk-free or less risky investment instruments. And, when we say about IPO, we all know what has happened recently in India. Tech companies were bleeding and we didn't see any retail investors get getting money out of it. So as of now, deeptech needs to be in the metamorphosis space, and it needs to grow and the evolution needs to be there so that even the retail investors understand deeptech," he added while speaking at the recently concluded Entrepreneur India's Tech & Innovation Summit 2023 in Bangalore.
An inherent advantage for most deeptech companies is IP creation. So, some experts feel that IP should be valued beyond immediate revenues and profits, while others feel that profitability is important for any business including deeptech.
"Any SaaS company is not going to be EBITA positive anytime soon, right? 90 per cent of SaaS companies are bound to fail. They need to raise a lot of funding in order to sustain themselves. And, intellectual property is not just about our copyrights or your trade secrets, but then you have probably taken like three years, like we did, to build your own datasets. Deeptech is no magic at the end of the day. There is a lot of data being infused into the system. That IP needs to be valued, more than the numbers on the table. Unless they do that, it is not going to be easy for any deeptech company to go IPO," said Sharmin Ali, founder and CEO, Instoried.
Some experts also spoke about how IP creation and profitability have to go hand in hand. "IP creation is part of the journey itself. So if we talk about tech, it requires a lot of investment, but at end of the day, it should solve some problems on the ground, which should directly result in profits. Else, if you see around us there are a lot of deeptech things happening in the academic world, but in order to make it a professional success, it has to make profits for the business," said Sunil Kumar, CTO, Shiprocket.
Sumit Sabharwal, CEO TeamLease HRtech also agreed with Kumar. "If you very well define what sector you are focusing on and what's the difference it makes to the end consumer or the user experience or the problem that it solves, then certainly it will attract a lot of not only investor attention, but a lot of customers and that's what basically the business is there for. So, our focus has to be on the user experience on solving the problem using the tech. Else, in the business world, it's not going to make that kind of impact," he said
Next leg of disruption
Talking about the future of AI and deeptech in India, Ramprakash Ramamoorthy, director of research, ManageEngine said that privacy will come in on a big scale. "Our laws have not evolved. I mean, not just in India, but across the globe, where the whole GDPR document does not even mention the word artificial intelligence or machine learning. So, and there are bills that are passed across different states that are at different stages, but there are no concrete laws that can tie AI and privacy so far," he said.
He also spoke about how sensitive enterprise information is leaving the system today in the form of translation and grammar tools that one uses. "In developing nations like India, people are not very privacy-aware. So we don't pay for our certificates. We don't pay for our social networks. So now Apple is doing a good job by calling privacy as a differentiator," he said. Thus, he foresees the evolution of privacy-enabled technologies in the near future. "I see tightening of privacy norms across apps. Privacy is going to be the next differentiator at least for the next decade. And hope privacy eventually becomes a commodity," he said.
Discussing the future of Chat GPT, Shashank Mohan Jain, chief development architect, SAP Labs India said, "The capabilities of ChatGPT are mesmerizing, to say the least. But there are huge amounts of privacy concerns when we use it. Like, in our company, we have so much customer data and privacy concerns that nobody is willing to share or tell you that you can just freely use this data and put them on ChatGPT or your servers and get the responses. So there are very strict guidelines even within the company on what you can do with ChatGPT and what you cannot."
He added that, having said that, ChatGPT is a great technology and what we need to do is look into the open source and provide some models which can be deployed in the company's private data centers, which will be a win-win for the customers as well as for the corporates.
Manikandan Thangarathnam, senior director, platform engineering, Uber for Deeptech also spoke about how finding a differentiator is going to be the key for most companies, by quoting ChatGPT as an example.
"A few years ago, when software companies were developing software, just building a large-scale distributed system, software itself was a differentiator. That was when very few companies were able to handle petabytes of data.. When all these cloud platforms like AWS or Oracle Cloud came in, people felt that ..Oh, my differentiator is gone," he said while comparing generative AI being in the same place today.
"Many more software players will enter the generative AI space. This will now become a commodity. It will become easy for companies to integrate and get AI-enabled solutions. So offerings will be much simpler and faster. That's when it will become important for companies to come up with a differentiating factor that others cannot replicate," he added.
Overall, experts feel that it's a great place and time to be in deeptech for Indian businesses.