AI Firms Getting GPU Sops May See Govt at the Table

Govt plan for small stakes signals shift from subsidy focus to long-term participation

- Shouvik Das

There's no free lunch for startups eyeing subsidized access to powerful graphics processing units (GPUs) under India's AI Mission. In return for the 'grant', the ministry of electronics and information technology (Meity) is considering picking up a 2-4% stake in the startups as part of its GPU allocation strategy, founders of three startups short-listed for the programme told Mint.

Four startups—Bengaluru-based Sarvam and Gnani.ai, Gurugram's Soket AI Labs, and Noida's Gan AI—have been shortlisted to use government-licensed GPUs.

The plan, which signals a shift from a purely subsidy-driven approach to one that seeks the government's long-term participation in the AI ecosystem, has sparked debate among founders and investors. While startup founders are happy with the assurance that comes with the government's skin in the game, investors raised concerns about conflict of interest.

A senior government official told Mint, requesting anonymity, that taking equity in the startups "is one of the many methods through which the government is considering rolling out the GPU access". The ministry is currently in the process of vetting these methods, and a final decision on how the funding will take place may be announced in the coming months.

"An equity stake model does not have to only be through sovereign funds—under National Quantum Mission, too, startup funding is being offered in exchange for equity stakes," the official said.

To be sure, the government earlier this year announced the $1.2-billion AI Mission—to offer a subsidized approach to access to GPUs, which are the lifeblood of AI firms. Reason: GPUs are expensive—Nvidia's chips cost up to $60,000 for a single GPU system—and beyond the capabilities of India's fledgling AI startups.