AI takes centre stage in policies of state govts to attract investors

The Indian government has earmarked Rs 10,300 crore over the next five years to set up 10,000 GPUs

As the dust settles on DeepSeek’s achievement, another Chinese firm, Alibaba, on Wednesday claimed that its latest version of the Qwen 2.5 AI model has surpassed the compatriot’s DeepSeek-V3.

 

Meanwhile, there is growing speculation in India over whether DeepSeek’s frugal setup will inspire entrepreneurs to develop generative AI (GenAI) solutions tailored to the country’s unique needs. The Indian government has earmarked Rs 10,300 crore over the next five years to establish at least 10,000 graphic processing units’ (GPUs’) worth of AI compute capacity in the country. 

Union IT Minister Ashwini Vaishnaw has said India’s first GPU will be ready by the end of the year. While the government is focusing on hardware, work is also underway on AI policy. In a recent interview with Business Standard, Vaishnaw said: “All this is under discussion. The committee headed by the principal scientific advisor to the government has given its report on approach to AI regulations. We are currently examining the recommendations.” 

Beyond the Centre’s initiatives, several Indian states have been proactively embracing artificial intelligence with their own policies and programmes. Many took bold AI steps even before the Centre launched the IndiaAI Mission, highlighting a drive to develop AI solutions tailored to national needs. Notably, southern states are leading the way, attracting rising investor interest in the region.

 

Tamil Nadu 

Tamil Nadu was among the first states to introduce a comprehensive AI policy focused on ethical and responsible development in 2020. It launched the Tamil Nadu Artificial Intelligence Mission (TNAIM) and is planning a dedicated Centre of Excellence for AI. 

This strategic focus has positioned Tamil Nadu as a GenAI hub, attracting interest from global players such as Google, PayPal, Applied Materials, and Amazon Web Services. AI applications in the state range from managing Chennai’s traffic and deploying facial recognition-based attendance systems in 3,000 government schools and offices to assisting farmers and introducing the e-Paarvai system, an AI-powered mobile application that detects cataracts in screened individuals.

 

Telangana 

The state aims to position itself as India’s GenAI capital by developing a 200-acre AI City near Hyderabad, designed as a research and innovation hub. According to government sources, Telangana is updating its IT policy, with a dedicated AI section expected to be unveiled this year. 

To build a skilled workforce, the state has partnered with major tech firms, including Nvidia, Microsoft, Meta, and Amazon Web Services, targeting the training of 500,000 AI professionals by 2027. 

Telangana has signed agreements with over 26 companies for AI initiatives. Microsoft will train 50,000 secondary school students, 10,000 vocational students, 20,000 industry workers, and 50,000 government officials in AI, digital productivity, and cybersecurity under the “Advantage Telangana” initiative. Nvidia will train 5,000 students from 200 technical and higher education institutions through its Deep Learning Institute (DLI) programme. 

Additionally, Meta and Telangana are working on integrating generative AI into e-governance. The World Trade Centers Association (WTCA) is also setting up an AI-centric World Trade Center near Hyderabad.

 

Andhra Pradesh 

Chief Minister N Chandrababu Naidu has set an ambitious goal: An AI professional in every family. The state has partnered with Google to train students and professionals in AI applications across industries, health care, and environmental sustainability. 

Andhra Pradesh has already implemented AI solutions, including predicting school dropouts among 5 million students with Microsoft, forecasting electricity demand for transmission companies, developing an AI-based ID system for pensioners, and assisting farmers in improving crop yields. 

The state is also developing a Data City for data centers and AI hubs near Visakhapatnam, expected to create 2 million jobs.

 

Karnataka 

Karnataka launched the Centre of Excellence in Data Science and Artificial Intelligence (CoE – DSAI) in Bengaluru way back in 2018 in collaboration with Nasscom. Since then, multiple policy initiatives have propelled AI and machine learning in the state. Aiming to become a global provider of GenAI solutions, Karnataka introduced the Global Capability Centres (GCC) Policy last year, targeting the establishment of 500 additional centers and the creation of over 350,000 jobs by 2029. The state is also developing an AI/ML administration unit and provides stipends to more than 200 students undergoing AI/ML vocational training.

 

Kerala 

Kerala has prioritised technology-driven investments and is introducing an Industries Policy that promotes AI-based industries. The policy offers 18 incentives to encourage AI-driven MSMEs and companies.

 

Maharashtra 

Maharashtra is preparing an independent AI policy to leverage artificial intelligence for industrial development. According to a PTI report, the state aims to position itself as a major player in AI innovation and technology.

 

Gujarat

  In December, Gujarat announced the formation of an AI task force to drive technology-led governance and socio-economic development. Chief Minister Bhupendra Patel signed an MoU with Microsoft to establish an Artificial Intelligence Center of Excellence at GIFT City. It will leverage machine learning, cognitive services, and bot technologies for pilot projects across multiple sectors. It will also support GenAI training programmes for government and industry stakeholders.

 

Making big bets

 

> Rs 33.8 trn is estimated economic value from AI adoption in India by 2030

 

> India saw the sharpest rise in share of AI talent at 263%

 

States’ GenAI road map

 

Tamil Nadu: Plans new AI labs, Centre of Excellence

Telangana: Upcoming 200-acre AI City, may revise IT policy to cover AI, aims to train 500,000 in AI by 2027

Andhra Pradesh: Developing AI hubs which may create 2 million jobs

Karnataka: Working on AI/ML administration unit

Kerala: Offering 18 incentives to promote AI-driven MSMEs, firms

Maharashtra: To draft an independent AI policy

Gujarat: Upcoming AI Centre of Excellence at GIFT City 

 

(With inputs from Shivani Shinde)