Most AI tools 'hallucinate'; not meant for Indian MSMEs : Vexoo Labs

Ajay Kumar, Senior Business Leader, AI Evangelist and a Board Advisor at Vexoo Labs said most AI tools today are built for showcase, not for reliability

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Most artificial intelligence systems suffer from the flaw of 'hallucination' and are not meant for India's small enterprises in manufacturing sector, deep-tech company Vexoo Labs has said and claimed its AI solutions are for the "real world".

"The focus on factual accuracy is both rare and crucial," said Ajay Kumar, Senior Business Leader, AI Evangelist and a Board Advisor at Vexoo Labs.

He said most AI tools today are built for showcase, not for reliability.

In the industrial alleys of Rajkot, the looms of Tiruppur, and the machining units of Coimbatore, India's small and mid-sized manufacturers are facing a silent crisis, he noted.

"It's not rising input costs or labour shortages alone - it's the growing complexity of data, and the absence of any reliable AI system to help make sense of it," Kumar told PTI on the sidelines of Super AI, a mega exhibition and conference held June 18-19.

According to Kumar, despite the global boom in artificial intelligence, "most systems on the market today suffer from a dangerous flaw: hallucinations confidently delivering factually incorrect information".

"For India's MSMEs, where decisions have direct operational and financial consequences, this isn't just a flaw, it's a liability," he added.

He further said that even at global AI showcases like Super AI, dozens of platforms claim to be transformative. But behind the gloss lies a glaring truth most are built atop general-purpose language models that continue to hallucinate.

"While the world chases scale and speed, accuracy has quietly fallen through the cracks," he said, adding, Vexoo Labs' reasoning-first architecture, compact models, and local execution capabilities make it especially relevant for Tier-II and Tier-III cities, where India's manufacturing momentum truly lies.

He said the company's focus on trustworthy AI for real-world India is already resonating across enterprise and public sector conversations.

"We didn't set out to build a shinier chatbot. We set out to solve the core flaw in AI itself hallucinations," added Aditya Vardhan, Co-Founder of Vexoo Labs.

"Manufacturers in Ludhiana, Surat or Bhiwadi shouldn't have to rely on guesswork. They deserve AI that answers clearly, correctly, and fast and that's what we're building at Vexoo Labs," Vardhan explained.

He said as India eyes to become a USD 5-trillion economy, the "real digital leap may not come from big cities or billion-parameter models, but from trust-first intelligence deployed deep within India's industrial backbone".