Patel noted that AI adoption in India is advancing rapidly, with 59% of large-scale enterprises integrating it to some extent. However, he noted that significantly scaling up these efforts remains a challenge, with issues around skills gaps, trust and infrastructure being major hurdles.
He added that IBM’s partnership with the Indian government focuses on two main areas: the implementation of IBM’s Watsonx artificial intelligence platform and advancements in semiconductor technology.
Indian startups and other entities are considering using Watsonx, a next-generation artificial intelligence platform, to foster innovation. Additionally, IBM is providing technological support in research and development for semiconductor chip design, which is crucial for India in its effort to establish its semiconductor manufacturing capabilities.
Patel expressed optimism about the growing semiconductor ecosystem in India, which he believes will be crucial in advancing the technology landscape as manufacturing facilities come online.
Patel also touched on the broader global business environment, noting that despite some pockets of slowdown, technology remains a deflationary force. In India, the outlook remains optimistic, driven by ongoing investments in digital transformation and emerging technologies such as AI. He reiterated IBM’s commitment to supporting India’s technology ecosystem, fostering partnerships and contributing to the country’s growing role in the global AI and semiconductor landscape.
Below are excerpts from the interview.
Q: There are many new developments, including collaboration with the Indian government on artificial intelligence (AI). Tell us about this, what specific areas do you intend to focus on and how do you expect this collaboration to develop?
Patel: I think we are seeing a lot of progress in a lot of the work that has been going on in India, and specifically in the area of artificial intelligence (AI). In many ways, we are entering the new era of digital transformation through AI. And given all the progress that we have seen, in many ways I think we are seeing the adoption of AI in a very significant way.
Where we are working with the government is clearly in the area of AI adoption. If you look at the numbers, we recently conducted a survey on the adoption rate and found that 59% of large-scale companies in India are using AI in some way, but only 24% have been able to scale it to a meaningful level.
Interestingly, India was one of the countries with the highest AI adoption out of all the respondents. We are doing a lot with AI. However, over 70% of the respondents basically said that the challenges in scaling AI are training, having the right kinds of skills, trust, and responsible AI, if you really trust the results, can you trust the data? And thirdly, how do you get the infrastructure to scale all this? In many ways, we are working with the government on AI in two dimensions. One is that we are working with them to provide our Watsonx platform, which is our next-generation AI platform, which is hybrid by design, multi-model by nature, which the government is looking at offering to startups and others. The second area where we are working with them is to provide technology research and development in the semiconductor area.
And although we are not in the manufacturing and packaging business, we are probably the world leaders in terms of semiconductor chip design. And that is an area where we are working with the government to make it available to local players as they set up their manufacturing and packaging units.
Q: On the semiconductor side, we are starting to see investments coming in and factories coming online perhaps by the end of next year, at least for the first ones. On the design and development side, I mean India has a long history of design and development for the chip sector globally. Now, A, where is IBM currently on that front? And how do you think that is going to change now that this ecosystem in the manufacturing sector is starting to develop?
Patel: We’ve always been at the forefront of chip design. Obviously, we’re out of the manufacturing and packaging business, but we recently announced our three-dimensional five-nanometer chips for our power servers, our Z mainframe servers, as well as our first AI-enabled chip. Those chips were launched and announced about a week ago. We’re on track to launch our two-nanometer chip next year. So these are developments that we’re continuing to push forward.
What I find very interesting is what you say about the ecosystem. In India, we are now in the early stages of what we are trying to do. However, the approach that has been set by the government, and if anyone did it at Semicon, was a very clear direction in terms of focus, investment and I think the enthusiasm of ecosystem partners and not just people who are doing manufacturing but other ecosystem partners, who are going to be very, very essential if we are to make significant progress in this race for this technology.
So I think the development of a broader ecosystem is going to be very important. And I think we are starting to see the government moving in that direction in India. We are starting to see the push from partners. And I think as soon as the first factories and packaging units come on board, the other ecosystems will start to develop around them.
Q: What does that mean in specific terms for IBM, beyond, of course, working with, supporting and facilitating government efforts? You just signed an agreement with L&T Technology Services. I mean, are there any more plans? More plans in the works?
Patel: Always more on the anvil. We are in active discussions with a number of the local players to share and work with them and collaborate on the technological advancements that we have obviously made. About a year ago we announced a consortium together with the government of Japan called Rapidus. And it is basically the government of Japan bringing us on board as their technology partners and creating a whole ecosystem of manufacturing and design partners who are now working on developing a two-nanometer chip in Japan.
Q: Could that be the model for something done here in India as well?
Patel: It could very well be, it could very well be. But I think it will just have to evolve and mature as some of these ecosystem partners come on board over time.
Q: You talked about what the government hopes to do with regard to Watson and you offered that to the government. What progress has been made in putting that collaboration into practice?
Patel: We have made it available to MeitY at CDAC and they are now starting to attract startups to use the platform and start identifying areas that can be significantly scaled in this space.
Q: Let us talk a little bit beyond AI and what the government is doing in relation to the global environment and also here in India. We have been through a period of volatility. Do you think the worst is over and we are now heading towards a return to spending? Or do you think the lull will continue at least till the US elections are over?
Patel: Regardless of the business environment, technology continues to act as a deflationary trend and I don’t think that has changed that much.
In India, the market and the outlook remain clearly bullish. I think globally, we are probably seeing pockets of slowdown, but I think the focus on digital transformation and IT investment in digitalization, on advancements in technologies like AI, which are really driving productivity and productivity improvements, and I think that will continue.
Watch the attached video for the full conversation.
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