Paytm investing to build AI software stack: Vijay Shekhar Sharma

Paytm founder Vijay Shekhar Sharma has noted in a letter to the company’s shareholders that the firm is investing in artificial intelligence (AI), focusing on building an Artificial General Intelligence software stack. This development is not intended solely for the Indian market but can also be leveraged outside India.

"Paytm is investing in AI with a view to building an Artificial General Intelligence software stack. By developing it in India, we are not only enhancing our country’s technological capability but also creating something that could be utilised outside India," Sharma stated in the letter.

The initial application that Paytm aims to harness AI for is small mobile-led credit. "In India’s digital revolution, following mobile payments, Paytm’s next significant contribution will be small mobile credit with high credit quality and full compliance with regulators' guidelines. This endeavour demands sophisticated capabilities in AI and other technologies. I am immensely proud of our advanced AI capabilities in use and our ongoing expansion," he further elaborated.

Sharma also mentioned that Paytm has successfully established a model over the past two years for distributing small digital loans through payment relationships with both consumers and merchants. Within this system, Paytm's lending partners assume the risk and make use of the fintech's capabilities to facilitate distribution and collection of loans.

“We are constructing an India-scale AI system, which will aid various financial institutions in identifying potential risks and frauds, while simultaneously shielding them from new types of risks arising from advancements in AI,” Sharma said.

He added that operations involving digital loans, their disbursal, collection, and the provision of small mobile credit with high credit quality in compliance with guidelines, will necessitate 'sophisticated capabilities in AI and other technologies'.

In May, in another letter to Paytm's shareholders, Sharma had expressed his belief that the emergence of Artificial General Intelligence (AGI) would present opportunities to enhance business efficiency and launch AI-first offerings.

The company foresees 500 million payment consumers and 100 million merchants in the country in the near future.

“We have established our mission to enable 500 million Indians to reap the benefits of mainstream economic growth. This commences with empowering them through mobile payments and extending various other financial services like loans and insurance. This is made feasible by Paytm leading the way, our government’s commitment to driving Digital India, and the regulator's support for building an open, scalable payment system,” Sharma explained.

In the company's Q1 results, its losses were reduced to Rs 358.4 crore, down from a loss of Rs 645.4 crore in the same period the previous year.

Earlier in August, Sharma acquired a 10.3 per cent stake in Paytm from Antfin (Netherlands) Holding BV in a no-cash transaction, making him Paytm's largest shareholder. Sharma obtained the shares in Paytm through his wholly-owned overseas entity, Resilient Asset Management, raising his stake to 19.42 per cent in the company.

The parent company of Paytm, One97 Communications, saw its shares end Monday's session 2.54 per cent lower at Rs 837.90 on the BSE. The company's market capitalisation was Rs 53,149.8 crore.