Advantage India as local companies ride ‘AI outsourcing’ wave

NSE-listed Latent View Analytics said their client conversations is up five times around Gen AI use-cases since the launch of ChatGPT while unicorn startup Fractal said its daily client queries numbers are up “dramatically” as it is now equal to the weekly queries number it used to receive earlier in February.

“It’s not always inhouse teams building these AI products. It is very parallel to the mobile app revolution that happened in the early 2010s. Almost every company was developing an app (then) and now that’s happening with AI,” said Abhishek Agarwalla, CEO and cofounder at AI consulting firm Aidetic.

ETtech

Experts and companies are dubbing it as “AI outsourcing” as existing members of clients are backlogged already with other product development work. They say typical advantages of outsourcing—progress quicker, budget constraints to host a dedicated team and get expertise are the reasons why the “AI outsourcing” is getting triggered.

“The launch of ChatGPT last year showed how large volumes of text data can be summarized and reviewed by people who are not data scientists…these launches (along with new Bing search engine) have triggered a five-times increase in conversations about Generative AI and its potential applications since early 2023,” said Ganesh Sankaralingam, director and delivery head of technology at Latent View Analytics.

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“As we had come into the period of February-March and beyond, the number of queries has been dramatically going up. We have gone from a handful of queries per week in February to the same number of queries coming in per day now,” said Bhaskar Roy, client partner of Asia Pacific region.

Many of these are either exploratory or educational in nature, while there are others that quickly move towards a PoC or experimental stage around specific Generative AI use cases, Roy added.

Work that’s being done

Though the technology is still at the development stage, a lot of startups and mid-size firms don’t want to miss the bus. Also, AI consulting firms say increased business is because of quicker process and customisation compared to tech giants like Accenture, Tata Consultancy Services and Infosys who are also not keen on chasing small ticket projects.

Companies say the top use-case is chatbots and virtual assistants. Aidetic said they are working with edtech startups who want to integrate conversational AI-powered tutor into their platforms. Also, asset management and wealth management platforms want to build private ChatGPT for their businesses as most companies are skeptical to build models using open-source framework due to data privacy concerns, Agarwalla of Aidetic added.

Fractal said customer service is one area where Generative AI is having “significant” applications as these systems can actually go through internal databases and other text information, and quickly help customers resolve the queries that they have because they essentially retain the context during the conversation. Similarly, Sankaralingam of Latent View Analytics said clients intend to mine social media data, end customer case notes, customer surveys, to summarize end-customer pain points to design better products and offer better service to them.

According to a FICCI-Access Partnership report released last week, it is estimated that use of generative AI to supplement work activities could help unlock $621 billion of productive capacity across the Indian economy, equivalent to 18% of GDP in 2021.

The manufacturing and wholesale and retail trade sectors are the largest contributors to this potential, largely due to the fact that they comprise a large share of the workforce and account for high labor productivity, the study said.