India now ranks 6th in share of GenAI startups among major economies

New Delhi, Oct 16 (IANS) India’s Generative AI (GenAI) ecosystem saw the total number of startups surging 3.6 times, from over 66 in the first half of 2023 to more than 240 in the first half this year, a Nasscom report said on Wednesday. India now ranks sixth globally in the share of GenAI startup ecosystems among major economies.

Despite an early-stage focus, the GenAI startups attracted over $750 million in cumulative funding since 2023, with 75 per cent startups in the January-June period in 2024 now generating revenue, a significant jump from 22 per cent in H1 2023.

Over the past 12 months, India's GenAI landscape has undergone a seismic transformation, with a wave of innovative product launches redefining industry standards and highlighting new focus areas such as managed large-language models (LLMs) and data-driven services.

“We must prioritise funding for high-potential GenAI startups and focus on attracting and developing top-tier AI talent. Through collaboration, we can unlock the full potential of GenAI and position India as a global leader in this technological revolution,” said Sangeeta Gupta, SVP and Chief Strategy Officer, Nasscom.

According to the report, the growth is majorly fuelled by the launch of 17 native GenAI language models in India, a 4.6 times surge in GenAI services, and a significant increase in the number of startups offering GenAI assistants comprising nearly 80 per cent of newly-added startups over the year.

About 43 per cent of GenAI startups now leverage a hybrid approach, combining both closed and open-source models for their solutions. This adaptability has helped growth across all three major segments of GenAI – infrastructure, applications and services.

About 70 per cent GenAI startups are expanding their offerings by delivering industry-specific solutions across sectors such as IT and communications, retail, healthcare, BFSI, education, and media and entertainment.

Bengaluru remains the leading GenAI startup hub in India, housing 43 per cent of all startups. Emerging hubs like Ahmedabad, Lucknow, Surat and Kolkata are growing quickly, now representing 18 per cent of the ecosystem, said the report.