 "Prashanth Prakash")
Generative artificial intelligence (AI), climate tech and fintech sectors will be the hot areas for venture capitalists and founders in the next year, according to the prediction by Prashanth Prakash, founding partner of the global venture capital firm Accel Partners in India and the chairperson of Karnataka Startup Vision Group.
Prakash said that about $25 billion has been invested into building Gen AI globally. But a lot of that capital has not yet come to India, opening up huge opportunities for startups in the country. He said that Indian startups are probably best positioned not to create new large learning models (LLMs), or build a lot of compute-intensive AI businesses, but actually can create picks and shovels.
“We can be the miners or folks who build applications on top of Gen AI,” said Prakash at the Bengaluru Tech Summit. “We can definitely be building infrastructure that will help enable deployment of Gen AI.”
Generative AI is a type of artificial intelligence technology that can produce various types of content, including text, imagery, audio and synthetic data. It is expected to disrupt the entire marketing stack and healthcare including drug discovery and create various ‘co-pilot’ opportunities across different verticals.
The other opportunity is climate technology. The startups are moving from building tech platforms to creating physical products and platforms to address some of the climate challenges that will first impact India.
“Once our startups build these technologies, we can take them to the Global North and work with the rest of the world,” said Prakash. “I think investors are getting more comfortable funding the innovation when it comes to physical product building because no large economy gets built only on the back of a digital economy.”
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He said that in a country like India manufacturing is key. A lot of investors and startups are now moving into and investing in the convergence of areas such as sustainable manufacturing, Industry 5.0 (people working alongside robots), the Internet of Things (IoT) and blockchain and AI in manufacturing. A new generation of manufacturing is expected to emerge from India and investors and founders are very interested in that.
The other big area of interest is fintech. What is unique about it is that it comprises billion scale transactions due to which new opportunities are expected to emerge. India will have 1 billion smartphone users by 2026 with rural areas driving the sale of internet-enabled phones, according to experts.
“Regulatory tech on top of the billion transactions is a great opportunity,” said Prakash. “There is also the opportunity for startups in the digitisation of land records and other government assets.”
