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Enterprises Must Fund AI, VCs Marginalized
22 Aug
Summary
- Large enterprises should invest in AI, says Shailendra Singh.
- VC funding for AI is becoming marginal due to immense capital needs.
- India lags in AI but aims for the frontier with government support.
Large enterprises are urged to invest in artificial intelligence, as venture capital is becoming marginal in the AI funding cycle due to the immense capital required. Peak XV Partners managing director Shailendra Singh stated that corporate balance sheets can deploy capital at a scale beyond most venture funds.
Singh emphasized that while VCs are crucial for identifying and nurturing early-stage companies, the sheer size of the AI cycle necessitates enterprises becoming a larger source of funding. He highlighted the unprecedented pace of change in AI during his career.
India currently trails behind the global AI technology frontier. To better support Indian founders, Peak XV Partners is investing in leading global AI companies to gain experience. The firm is committed to long-term investments in India to help it reach the AI forefront.
Peak XV Partners, having raised a $1.3-billion fund, is focusing heavily on AI across various sectors. The firm has made early investments in Indian AI startups like Sarvam AI and has backed US-based ventures such as Wispr Flow. The Indian government is also actively promoting AI through the IndiaAI Mission, supporting indigenous models and subsidized compute power.
Infrastructure, particularly compute and affordable power, is identified as a key value driver in AI. India's competitive costs for power and data centers could lead to substantial data center capacity expansion over the next five to ten years.
