Indian Gen AI Investment report
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Infrastructure layer

An AI infrastructure encompasses the hardware, software, and networking elements that empower organizations to effectively develop, deploy, and manage artificial intelligence (AI) projects. It serves as the backbone of any AI platform, providing the foundation for machine learning algorithms to process vast amounts of data and generate insights or predictions.
These can be categorised in two categories:-
1. Data Storage and Management - AI applications require large amounts of data for training and validation. A reliable data storage and management system is necessary for storing, organizing, and retrieving this data. This could involve databases, data warehouses, or data lakes, and could be on-premise or cloud-based. Proper data management also includes ensuring data privacy and security, data cleansing, and handling data in various formats and from various sources.
2. Compute Resources - Machine learning and AI tasks are often computationally intensive and may require specialized hardware such as GPUs or TPUs. These resources can be in-house, but increasingly, organizations leverage cloud-based resources which can be scaled up or down as needed, providing flexibility and cost-effectiveness.
Understanding Infrastructure layer
0
Factors
Description
Thesis
1
Underlying technology
Efficient hardware management, lossless data transmission, configurability, low latency and other features comprise
Proprietary IP; Very difficult to build
2
Engineering effort
Very High
Very high engineering effort
3
Data Availability
Data Independent
-
4
Distribution & Adoption Effort
Digital distribution; Low effort
High effort of transition from existing to new infra layer. High setup costs, architectural changes required in the system design for optimised performance.
Very High adoption effort
5
Capital requirement
Very high fixed costs for GPU acquisition, server & connectivity setup
Very high maintenance costs for efficient usage of GPUs & servers.
Very High (in 100s of Millions USD)
There are no rows in this table

Conclusion of Investment thesis for Infrastructure layer

Difficult to replace existing players
Very difficult to build an Infra layer out of India or anywhere on the globe, without a huge technological revolution that disrupts the current method of cloud usage (Possibility in Web3 segment via decentralised cloud hosting)
Low chance of success since success depends on massive adoption by big players who are very cautious of the services they choose & cost of transfer is also very high.

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