Why India is Falling Behind in the Race for AI Patents 

Artificial intelligence (AI) is everywhere. Be it in the way we consume content, the way e-commerce is shaping up, or the way we order food—you name it, and AI has a role in it. 

With AI being an integral part of our lives, nations are investing a lot of money in AI research. India will spend $6 billion on AI by 2027, as per the International Data Corporation (IDC). Additionally, the corporation reportedly anticipates that global spending on AI will reach $512 billion by 2027, more than tripling from 2024 levels.

However, in terms of AI paper contributions to AI conferences, India holds the 14th rank in the race, which is just 1.4 per cent of the global share. This is based on a study by Change Engine, a Delhi-based AI accelerator builder, with details shared with the Economic Times. 

With 30.4 per cent and 22.8 per cent contribution, the USA and China dominate the race, adds the report. The study further indicates that AI research in India must increase by 50 per cent to touch the global share in five years. 

While India's growth rate in AI research papers is limited, its Asian counterparts such as Hong Kong, Singapore, and South Korea have seen a surge in their growth rates, adds the report. 

There has been a wave of AI patents in the world. A UN report published in July indicates that China is leading in the general AI race. The ‘Patent Landscape Report’ by the UN highlights that more than 38,000 GenAI patents came out of China. This was six times more than the number of patents filed by the USA, which is in the second position. 

China dominates the field with 38,210 inventions, significantly surpassing the US with 6,276 inventions. It is followed by the Republic of Korea with 4,155 inventions, Japan with 3,409 inventions, and India with 1,350 inventions. 

Even in terms of institutions filing for patents, China’s Chinese Academy of Sciences dominates the list with more than 1,100 publications filed since 2010, adds the report. It is followed by Tsinghua University of China and Stanford University of the United States. 

Interestingly, when measuring impact by citations, companies lead, with Google far ahead. Additionally, OpenAI, despite publishing just 48 articles, ranks 13th in citations with 11,816, showing significant influence, adds the UN report. 

India's AI Industry Poised for $17 Billion Growth by 2027

AI as a whole is not a foreign concept in India. India is making impressive strides in the AI sector, with its industry expected to hit $17 billion by 2027, as per a report by industry body Nasscom and consulting firm BCG.

India also boasts a strong AI skill penetration rate of 2.8 per cent, surpassing the USA's 2.2 per cent and Germany's 1.9 per cent, according to the Stanford AI Index 2024 report.

Despite its strong AI adoption, India lags in research and development compared to global leaders.

India Trails in AI Patents Compared to China

As mentioned before, India has 1,350 inventions as compared to China with 38,210 inventions. A key factor is the talent shortage and retention issues, with skilled individuals often opting for opportunities in western nations. Factors such as more flexibility in work-life balance, better living standards, and better infrastructure makes people go abroad instead of staying in India.

Currently there are less than 500 active and accessible researchers in the field of AI, as per specialist staffing firm Xpheno. This was reported by Moneycontrol.

“Talent retention is a big problem, leading to considerable brain drain. Indian educational institutions, excluding government ones, generally emphasise teaching over research, resulting in less focus on advancing research initiatives,” says Dr Rushi Anandan, adjunct faculty, general management, K J Somaiya Institute of Management. 

Another area of concern in the country is the low spending by the government on research and development (R&D). The Economic Survey highlighted that India's R&D investment is 0.64 per cent of GDP. This is significantly lower than China's 2.41 per cent, the US's 3.47 per cent, and Israel's 5.71 per cent.

The country’s overall spending on education is low. A Deloitte report called ‘India economic outlook, August 2024’ says, “The declining share of spending on education is a concern though, especially in urban spending, where the share declined by 2.43 per cent since 2009-10."

This is in sharp contrast to countries such as the USA, UK, and Israel, which spend around 6-7 per cent of their GDP on education. Insufficient investment in education inevitably hinders the country's progress in research and development.

Read: Google to Expand AI Initiatives in India, Targeting Language Barriers, Agricultural Efficiency

While looking at fewer AI patents in the country, it becomes pertinent to see how companies and AI start-ups are doing. Private sector support is vital for advancing in the global AI race. However, limited focus on research and development by companies can impede progress.

“Indian IT companies, like Infosys and TCS, which prioritise IT services, also need to contribute more by investing in fundamental research,” adds Anandan. 

The 'Patent Landscape Report' highlights that companies from China and the USA lead the GenAI patent race, with India nowhere in the scene. Tencent, Ping An, and Baidu top China's list, while IBM, Google, and Microsoft lead in the USA. Samsung Electronics also ranks in the top 10 from South Korea. One reason for the same is the low investment made by companies on research and development.

Read: Dell To Cut 12,500 Jobs to focus on AI: Can AI replace your Job? 

Additionally, as per a Mint analysis published in December 2023, less than 0.5 per cent of revenue was allocated by companies such as Tata Consultancy Services, Wipro, and Tech Mahindra in FY23 to innovation.

State of India’s AI Start-Ups 

Start-ups can be an area from where innovation and focus on research and development comes in. India already has more than 6,000 start-ups, however, one factor acting as an obstacle for the growth of start-ups is funding. Less funding, decrease the ability of start-ups to invest in cutting edge technology, which in turn lowers innovation in research and development.

As per data platform Tracxn, in the April-June quarter, the funding of AI start-ups was $8.2 million. This marks a 91 per cent drop from the previous quarter and an 82 per cent decline from last year, as per the Economic Times. 

Further, a report by Tracxn says that when it comes to funding for AI start-ups for infrastructure and services, there has been a sharp fall from $554.7 million in 2022 to $113.4 million in 2023.

On the other hand, in countries such as the USA, the funding grew from $5.2 billion in 2022 to $16.2 billion in 2023. This was first reported by TechCrunch.

Increasing funding as well as support for AI start-ups in India could potentially boost the number of AI patents. This will, in turn, align the country more closely with global leaders. 

Low GPU Capacity

When it comes to the usage of AI in work and academia, the low GPU capacity of India is a matter of concern. A GPU is a hardware component that is designed for fast mathematical calculations.

While they were originally created for rendering graphics in video games, GPUs are now utilised in AI for their ability to handle multiple operations at once. The computational power of GPUs is needed for advanced AI and machine learning projects.

Vishal Dhupar, MD of Nvidia Asia South, highlighted at the StartUp Mahakumbh in March this year that India’s contribution to global computing infrastructure is under 2 per cent. In comparison, the combined contribution of the US and China is nearly 58-59 per cent. 

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Dhupar reportedly mentioned that quickly building infrastructure for accelerated computing will drive research and innovation, and could add $1 trillion to the economy. He also highlighted that the lack of computational infrastructure is the key determinant for the country's poor contribution in global AI research.

Speaking at the StartUp Mahakumbh, he reportedly said, "Indians who contribute to the research but are not based in India are contributing 12 per cent of AI research, because there's infrastructure available there."

Government Steps In

Recognising the need for computational infrastructure, the government launched the IndiaAI mission in March with a Rs 10,372 crore budget over five years to boost AI infrastructure and start-ups.

Further, the government in July this year earmarked Rs 5,000 crore to provide 10,000 GPUs, as per a Moneycontrol report. This is a part of the IndiaAI mission. 

Abhishek Singh, additional secretary at the Ministry of Electronics and Information Technology (MeitY), explained at the Global IndiaAI Summit that the plan isn't to purchase chipsets and create a publicly owned infrastructure. Instead, the government intends to subsidise part of the cost of accessing compute resources while encouraging private investment.

The government stepping in to enhance the AI infrastructure of the country, is a step forward for the deep-tech sector as whole. While it remains to be seen where India will stand in terms of global AI research contribution in the long run, a push for GPUs will definitely help start-ups and academia.