India’s Proposed Deal with Nvidia

April 18, 2024

India is considering striking a deal with Nvidia, the US-based manufacturer of graphics processing units (GPUs), to source GPUs and offer them to local startups, researchers, and academic institutions at subsidized rates. This initiative is part of India’s ₹10,000 crore Artificial Intelligence Mission, which aims to boost the country’s AI ecosystem and capabilities.

Proposed Models for GPU Access

Graphics Processing Units (GPUs) are crucial components in the AI ecosystem, enabling faster and more efficient processing of complex mathematical operations required for training and running AI models. In the context of India’s AI initiatives, the government is considering a deal with Nvidia to source GPUs and offer them to startups, researchers, and academic institutions at subsidized rates to boost the country’s AI capabilities and competitiveness.

India is considering two possible ways to provide AI compute infrastructure to its companies:

Rent-and-sublet model: The Ministry of Electronics and Information Technology will acquire GPUs from Nvidia and provide them to startups, researchers, and others who qualify for the plan on a concession basis.
Marketplace model: The government will encourage companies to strike their own renting or subletting deals with Nvidia and provide incentives based on incremental productivity achieved through these GPUs, similar to the production-linked incentive (PLI) schemes.

Need for Government Intervention

GPUs, such as Nvidia’s latest offering Blackwell, are highly expensive, with each unit costing up to $40,000.
Most computing capacity creation requires hundreds of GPUs at the same location, making it difficult for small companies and startups to invest the required amount.
India also currently lacks enough GPUs, forcing AI startups and companies to utilize compute infrastructure abroad, significantly increasing their costs.

Status of India’s AI Mission and GPU Deployment

In March, the Indian Cabinet approved the ₹10,372 crore India AI Mission, under which the government plans to deploy 10,000 GPUs through public-private partnerships. The mission aims to establish a strong AI compute infrastructure to support India’s growing AI ecosystem.

Additional Facts of India’s AI ecosystem and capabilities

India’s supercomputer ‘AIRAWAT’, installed at the Centre for Development of Advanced Computing (C-DAC) in Pune, is currently the world’s 75th fastest supercomputer and has 640 GPUs. In comparison, the world’s fastest supercomputers have more than 30,000 GPUs.
The Indian government’s National Strategy for Artificial Intelligence, released in 2018, identified five focus areas for AI development: healthcare, agriculture, education, smart cities, and transportation.
India ranks third in the world in terms of the number of AI companies, with over 3,000 startups working on AI-related technologies and applications.
The Indian IT industry is expected to reach $350 billion by 2025, with AI and other emerging technologies playing a significant role in driving this growth.

India’s potential deal with Nvidia and the initiatives under the AI Mission demonstrate the country’s commitment to developing a robust AI ecosystem.

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