The AI challenge: How to maximise economic impact, spread gains evenly

The global focus on AI has been on generating intelligence, with trillions invested in infrastructure to train and run powerful models. Companies and countries are being categorized as winners or losers in the AI race, but this narrow view might be insufficient. Economic value is created not only by generating intelligence but by deploying it effectively.

India, being a fast-growing major economy, has demonstrated the ability to deploy technology at scale, as evidenced by its digital public infrastructure. The World Bank Group's report, 'The Promise of Artificial Intelligence,' suggests that AI can contribute to sustainable growth, increased productivity, improved public services, and expanded opportunities.

However, the largest gains are not likely to stem from building frontier models, but rather from applying AI to solve practical problems at scale. In low- and middle-income countries, only 4.5% of existing jobs are highly exposed to automation by generative AI, while 16.2% could experience significant productivity gains. For most workers in developing countries, AI is more likely to complement rather than replace their roles.

Building strategic capabilities such as domestic research, Indian-language models, and a stronger ecosystem for deep-tech investment is essential for India to move from isolated AI applications to economy-wide productivity gains.