In recent years, artificial intelligence (AI) has rapidly evolved from a nascent technology to a catalyst for industry transformation. In 2023 and 2024, Generative AI models have dominated the headlines. According to a McKinsey report titled ‘Economic Potential of Generative AI’, Generative AI could add up to $4.4 trillion annually to the global economy.

In India, Generative AI is helping advance diverse sectors, from farming and education to manufacturing, banking, automobiles, e-commerce, and healthcare. New Indic-language models like OpenHathi for Hindi and Kan-Llama for Kannada are making AI accessible to diverse linguistic populations.

The Indian government has also launched INDIAai to promote AI development and adoption in the country. Similarly, Bhashini by MeitY is aimed at creating a national digital public platform for AI-based language technologies, making these tools accessible in all Indian languages.

Why Industries Need to Adopt AI

AI adoption is projected to contribute an additional $1 trillion to India’s economy by 2035, according to NASSCOM. This value comes from automating complex tasks, enhancing productivity, and powering new products and services.

Industries such as finance, healthcare, media and retail are likely to see the most significant transformations. For example, AI-driven automation in finance could reduce operating costs by 22%, while AI in healthcare could improve patient outcomes by predicting diseases at early stages. Adopting AI solutions is no longer optional but a necessity for industries aiming to stay competitive.

Generative AI, in particular, is expected to significantly impact the media industry by enhancing content creation, personalisation, and automation. AI tools will streamline back-end tasks such as tagging, copy-editing, and transcription, while also generating summaries and headlines. This technology is promising to serve as an invaluable assistant to media professionals.

AI Startups in India

India is home to over 31,000 tech startups, with 70% investing in AI, according to a NASSCOM and Zinnov report. Startups are at the forefront of AI innovation, leveraging open-source technologies to develop solutions that challenge the status quo.

A number of AI Startups are leveraging fine-tuned versions of LLM models like Llama3 and Mistral, along with emerging architectures such as Retrieval-Augmented Generation (RAG), to create a range of powerful AI applications. These include conversational AI chatbots and AI assistants that enhance customer interaction and automate routine tasks. They are also creating coding assistants that integrate deeply with Integrated Development Environments (IDEs) like Visual Studio Code.

Media-focused startups harness fine-tuned versions of Stable Diffusion, AudioGen, and MusicGen to create brand-specific image, video, audio, and music content. Computer vision startups use object detection models like Yolo for image-based analytics, object tracking, and developing assistants for healthcare professionals.

With increasingly advanced open-source AI models being released more frequently, startups can now develop sophisticated applications that were previously unimaginable in a very short time. This dynamic ecosystem, unfolding on platforms like Hugging Face and GitHub, enables startups to create cutting-edge AI solutions and challenge existing paradigms.

How AI Startups Can Help Drive Industry Transformation

Startups are actively driving AI innovation and applying novel approaches to solve significant business challenges. They bring fresh perspectives and cutting-edge solutions, while industries offer scale, resources, and domain expertise. By working together, they can leverage their respective strengths, which is already showing promise across various sectors.

In healthcare, startups are developing advanced diagnostic tools, personalised treatment plans, and predictive models. AI is used for early detection of breast cancer, and AI integration in drug discovery is expected to reach $4 billion by 2027, with a CAGR of 45.7%.

In agriculture, AI provides farmers with real-time data on crop health, weather patterns, and soil conditions, leading to better yields and reduced wastage. In media and entertainment, startups are helping scale production and driving down costs, creating realistic animations, special effects, and entire scenes in movies and video games purely using Generative AI. AI-powered virtual fitting rooms in fashion allow customers to try on clothes and accessories digitally, enriching the online shopping experience.

In finance, startups are building AI models to detect unusual patterns and behaviours in financial transactions, improving fraud prevention and offering credit to underserved populations, thereby promoting financial inclusion.

In education, generative AI is transforming learning experiences. Malar Teacher, the world’s first AI university professor, recently launched and uses WhatsApp to teach engineering students, simplifying complex topics.

Despite the impressive capabilities we have already witnessed, we are still in the early days of generative AI technology. In 2024, advanced frameworks like DSPy and ReAct are emerging, enabling the creation of AI agents capable of reasoning over complex problems. These agents continuously improve their performance and adapt to user needs in real-time. New multimodal AI models are also being developed, which can reason over text, video, audio, and images, and respond in real-time.

Future Outlook

As AI technology becomes more advanced, industries should leverage innovations from AI startups to build new products and drive efficiency. The future promises unprecedented opportunities for growth, making AI an essential component of competitive and forward-thinking business strategies. Embracing this technological evolution will be crucial for industries aiming to stay ahead in a rapidly changing global market.