India’s competition watchdog, the Competition Commission of India (CCI), has issued a crucial alert regarding the country’s burgeoning artificial intelligence (AI) economy. A recent market study highlights that the dominance of a few large tech firms over essential AI resources—such as data, computing power, and foundational models—could create significant barriers for new entrants, including startups and small to medium-sized enterprises (MSMEs).
The CCI’s study emphasizes that this concentration of power could hinder the growth of smaller players, as established companies often possess vast datasets and significant financial backing, making it difficult for newcomers to compete. The commission stresses that removing these barriers is vital for fostering a fair and competitive AI marketplace, encouraging new talent, and promoting innovation.
To address these concerns, the government has launched the India AI Mission with a substantial budget of ₹10,300 crore. This initiative aims to provide over 38,000 GPUs at subsidized rates, support 12 selected startups in developing foundational AI models, and populate the AI Kosh platform with over 2,000 anonymized datasets for training purposes.
Startups involved in the India AI Mission have voiced concerns about big tech’s data control and potential algorithmic biases. While acknowledging the need for regulation, they also expressed worries that excessive regulation could stifle innovation. Many believe that increasing public access to anonymized data is key to leveling the playing field.
The report highlights a positive trend: the prevalence of open-source technologies in India’s AI sector. Approximately 76% of startups reported using open-source tools, which significantly lowers entry barriers and facilitates rapid innovation. Kazim Ruzvi, founding director of tech policy think-tank The Dialogue, noted that this reliance on open-source solutions empowers smaller firms to compete effectively, contributing to a more inclusive digital economy.
To proactively manage competition risks, the CCI has suggested that AI companies conduct self-audits to identify and mitigate potential anti-competitive practices. The study includes a ‘Guidance Note on Self-Audit of AI Systems for Competition Compliance,’ offering a six-pillar approach covering governance, algorithm design, data assessment, monitoring, transparency, and integration with compliance programs.
The CCI plans to actively promote a competitive AI ecosystem through various measures, including conferences, workshops on AI and competition compliance, establishing a think tank focused on digital markets and AI, and collaborating with international regulatory bodies.