India, let's get AI-ready, steady, go

The search for AI talent has turned into a brutal hunt with tech companies poaching engineers for more than what other firms pay their bosses. Meta, Alphabet and Microsoft-backed OpenAI are offering pay packages in the region of hundreds of millions of dollars to execs who could unlock possibly trillion-dollar breakthroughs. Silicon Valley is tantalisingly close to the AI payoff, but is not there just yet. The eye-watering hires are tough to explain to existing employees, and companies are approaching the HR issue tentatively. Big Tech continues to downsize in other areas, which makes the signing bonuses offered to AI engineers a touchy matter within organisations.

The presence of Indian-origin engineers in the top AI talent pool should work as a signalling mechanism to India's large tech workforce confronting a wage freeze. The labour market will correct for the imbalance by widening the funnel for AI engineers. The process can be aided through policy intervention. India has unveiled an AI mission to speed up technology dispersal. But the country's focus is on downstream applications. The more promising area is agentic AI, where business processes can be automated to run and collaborate independently. The demand for AI talent in the domestic market should take off when companies are ready with their strategies to incorporate AI at the enterprise level. Local AI skilling will have to draw up an adequate supply response for technology costs to be driven down.

Indian tech companies offer a pathway for technology workers to acquire relevant skills. The country's technology services exports will have to pivot to new organisational structures incorporating digital agents. Outsourcing of business processes is expected to be affected by AI. India has shown remarkable resilience in navigating tech disruption, and the latest transition should present opportunity along with the challenge. Without its sizeable technical workforce becoming AI-ready, the cost of technology diffusion will remain elevated.