Takshashila Discussion SlideDoc - An AI Hardware Ecosystem in India: A SWOT Analysis

Executive Summary

This document covers the growth of the AI hardware ecosystem around the world and how India can focus on building its domestic capabilities in the domain. It delves into the AI hardware market's global landscape and the domain's economic opportunities. Three recent trends in the semiconductor and AI industries warrant a comprehensive AI hardware policy in India:

• A gradual transition from manufacturing general-purpose to application-specific hardware around the world

• The improved cost-benefit ratio for India to focus on the development of inference-related AI chips

• Emerging alternatives to ARM processor architectures which can handle AI workload better and more efficiently

From an Indian semiconductor and AI perspective, the current ecosystem can be analysed in the following aspects:

• Strengths include semiconductor design expertise and the rise in domestic IP related to AI applications

• Weaknesses are poor R&D ecosystem, supply chain infrastructure and the current investment climate

• Opportunities are the multiplier effects that AI hardware possesses in providing policy solutions for critical sectors

• Threats include the head start that the US and China have gotten in the AI hardware race and prospective regulations on the use of AI in specific applications

If an AI hardware policy is implemented in the country, policy priorities should include,

• A dedicated trailing edge fab that handles AI inference chip manufacturing

• Supporting and funding open source projects specifically related to AI hardware design

• Expanding existing manufacturing and design policy schemes to include AI hardware development

• International collaboration, especially with the US and Quad, to integrate AI hardware at the multilateral stage

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