India in Talks with Nvidia for Discounted GPUs to Drive AI Mission and Support Local Startups

India is currently in discussions with Nvidia, a leading US-based GPU manufacturer, to procure graphics processing units (GPUs) at discounted rates as part of its ambitious Rs 10,000 crore Artificial Intelligence Mission. The goal is to provide these GPUs to local startups, researchers, academic institutions, and other users. The final decision on the plan will be made post-elections, as per a government official mentioned in a report by The Economic Times.

Given Nvidia's strong position in the global GPU market, it is a logical choice for the Indian government as it aims to establish AI computer infrastructure. To address the issue of expensive and limited GPUs, India is exploring two potential approaches. The first involves direct acquisition of GPUs from Nvidia by the ministry of electronics and information technology, while the second is a marketplace model that allows companies to engage in rental or subletting agreements, with government incentives similar to production-linked incentive (PLI) schemes.

The high cost of GPUs, with Nvidia's latest offering priced at up to $40,000 per unit, has led to the need for government intervention. Small companies and startups struggle to afford the necessary computing capacity, hence the need for subsidies. Earlier this year, the Indian government approved the Rs 10,372 crore India AI Mission, with plans to deploy 10,000 GPUs in collaboration with the private sector.

Startups, researchers, and other eligible entities can access GPUs at discounted rates under the rent-and-sublet model, while a marketplace model is also being considered. Nvidia, being one of the primary GPU manufacturers, offers their GPUs to both private and public buyers through the Nvidia Partner Network. Indian companies such as the Reliance Group, the Tata Group, and Yotta Infrastructure have already entered into agreements with Nvidia to bring GPUs to domestic firms.

For instance, Yotta plans to import 24,000 GPUs, including Nvidia H100s and L40S, with the first batch expected to arrive in March. Indian companies and CEOs have been advocating for increased government investment in computing capacity to enhance India's competitiveness in the global AI landscape and safeguard Indian data sovereignty. India's supercomputer "AIRAWAT" currently holds the 75th spot globally and houses 640 GPUs, whereas some of the fastest supercomputers worldwide boast over 30,000 GPUs.

With countries like China and the US heavily investing in GPUs for commercial and national security needs, India's collaboration with Nvidia to secure GPUs is viewed as a strategic move to bolster its AI capabilities on an international level.