Analysts predict that increased financial support for GPU infrastructure will drive higher adoption of AI technology

The government’s proposal to finance up to 50 per cent of the cost of setting up artificial intelligence (AI) compute infrastructure has been met with enthusiasm by industry players and analysts. This move is expected to reduce graphic processing unit (GPU) usage costs in the country and accelerate the adoption of AI technology.

Amrish Pipada, Founder & CEO of Mega Networks, a leading AI server manufacturing company, praised the Ministry of Electronics and Information Technology’s (MeitY) plan, calling it a positive step towards incentivizing industry investment in GPU capacity. He believes that this initiative will attract more investment, leading to advanced homegrown infrastructure and furthering capabilities in the AI sector.

At a recent event organized by CII, MeitY Secretary S Krishnan announced the government’s intention to partner with private players to develop high-end compute capacity within the country under the India AI mission. While the industry welcomed this announcement, they also highlighted the need for government intervention in areas such as skilling initiatives and regulatory support.

Analysts have also lauded the fiscal support, stating that it will encourage local AI initiatives, particularly in the government sector and India’s vast MSME sector. Naresh Singh, Senior Director Analyst at Gartner, emphasized the importance of this initiative in making AI infrastructure more accessible and affordable.

Overall, industry players see the government’s move to subsidize the use of GPU servers as a positive step that will empower companies to build use cases and applications for Gen AI. This initiative is expected to boost demand for GPU server solutions and drive growth in the industry in the long term.