Mohandas Pai Advocates for Frugal AI Innovation in India
Mohandas Pai urges India to adopt a frugal innovation approach in AI, suggesting a focus on developing vertical large language models for specific sectors. He stresses the need for investment in key technological domains and improved regulations to attract foreign capital. Pai argues this strategy could enhance India’s digital capabilities and competitiveness in the global market.
Mohandas Pai, the former CFO of Infosys and current chairman of Aarin Capital, emphasized the necessity for India to adopt a frugal approach to artificial intelligence (AI) innovation, akin to China’s DeepSeek. He asserted that India cannot afford to invest enormous amounts of money into annual AI research and development and must instead prioritize cost-effective strategies for advancing AI technologies. Pai spoke at the TiEcon Mumbai 2025 event, stating, “We cannot put billions of dollars in R&D every single year because we do not have that kind of money. What DeepSeek did is very unique. They brought down the computing requirement by 75 percent.”
Pai advocated for Indian companies to concentrate on developing vertical large language models (LLMs) tailored for specific sectors like financial services, healthcare, and high-tech manufacturing rather than trying to compete with general-purpose models such as ChatGPT. He believes that this targeted approach could establish India as a leading digital power in the upcoming decade, reinforcing the importance of sector-specific innovations. Pai reiterated the need for focused development on vertical LLMs and underscored the evolving role of AI in driving innovation cycles.
He observed that as AI automates routine tasks, the pace of innovation would increase significantly, enabling faster discoveries. “Greater discoveries and innovation will happen faster. Innovation cycles will come down because innovation includes search, reasoning, and the creation of models—which can be done by AI,” he elaborated. Pai recommended that India concentrate on five to six key technology domains, including AI, machine learning, robotics, biotechnology, and high-tech manufacturing.
Furthermore, Pai articulated the necessity for a collaborative effort among top engineering schools and industry partners to foster innovation, proposing an annual investment of one billion dollars per area to catalyze progress. He noted the importance of improving the ease of doing business in India to attract foreign capital and stressed the need for clearer regulatory guidelines for startups. Pai remarked, “The problem in India is the detail. We talk about ease of business, but what is it? What are the things you must do?”
Moreover, he pointed out the bureaucratic challenges faced by foreign investors and suggested that India must simplify its processes to create a more inviting environment for capital. He cited that despite recent efforts by the Reserve Bank of India, the influx of foreign direct investment (FDI) had declined significantly. This reduction, as highlighted by the RBI data, illustrated the ongoing struggle to make the country a competitive destination for investment.
In summary, Mohandas Pai advocates for a frugal and focused approach to AI innovation in India, emphasizing the development of vertical large language models tailored towards specific industries. He calls for strategic investment in key technology sectors and highlights the urgent need to streamline regulations to attract foreign investment. By fostering collaboration among educational institutions and industries, Pai believes India can position itself as a dominant force in the digital landscape, despite current challenges in foreign investment.
Original Source: www.business-standard.com
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