Rama Krishna Sangem
A deal is expected between India and Nvidia to procure graphics processing units (GPUs) from the American manufacturer. The GPUs could then be provided to local startups, researchers, academic institutions, and other users at a subsidised rate as part of a Rs 10,000 crore programme to set up artificial intelligence (AI) infrastructure in the country, Economic Times (ET) reported.
GPU is a specialised chip that renders graphics and images by performing rapid mathematical calculations that are needed in processing AI. A government official told ET that the plan for Nvidia is at a “very early stage” and a decision will likely be made after the Lok Sabha elections. Given Nvidia’s significant market share in the GPU sector, it would be the natural preference for the Indian government, said the official.
The report stated that establishing AI computing infrastructure has evolved into a strategic concern for nations. They are investing billions of dollars to secure computing capacity, both for their domestic companies and for meeting national security requirements. China and the United States have started acquiring Nvidia’s range of GPUs, which includes H100 chips.
India is considering two potential methods to furnish AI computing infrastructure to its companies. While one is a “rent-and-sublet” model, wherein the Ministry of Electronics and Information Technology directly procures GPUs from Nvidia. The alternative model adopts a marketplace approach, wherein the government incentivises companies to negotiate renting or subletting agreements with the supplier themselves.
Each GPU to cost $ 40,000
“These incentives will be based on incremental productivity achieved through these GPUs,” another government official said. The report stated that the government intervention becomes necessary as GPUs, such as Nvidia’s latest offering Blackwell, can cost up to $40,000 per unit. In March this year, the Centre approved the Rs 10,372-crore India AI Mission, under which the government will deploy 10,000 GPUs under public-private partnerships.
In the rent-and-sublet model, the Centre will provide GPUs to startups, and researchers on a concession basis. An official told ET, “For the second option, some kind of marketplace will have to be thought of where performance can be objectively measured and thus the incentives be distributed. Or we will need a PLI-sort of compensation formula where the company which has worked out a GPU deal can show credible results to obtain the necessary benefits.”
