Won’t get AI revolution with spending alone, say experts

Economist Narendra Pani said the Centre had little money to spend anyway, adding that intellectual capital and other input were needed to produce a chatbot like DeepSeek

Bengaluru: Economists reasoned that the scarcity of allocations for Research and Development (R&D), particularly for technological purposes, wasn’t a major deficiency in the Union Budget presented on Saturday. They added that the Artificial Intelligence (AI) boom that was happening currently, especially with the Chinese company DeepSeek releasing its highly-efficient chatbot recently, was not the result of big spending alone. According to initial reports, the “large language model” (LLM) which the DeepSeek app uses has capabilities comparable to US models such as OpenAI’s o1 but the former needs a fraction of the cost to train and operate.

Economist Narendra Pani said the Centre had little money to spend anyway, adding that intellectual capital and other input was needed to produce a chatbot like DeepSeek. “There are two things. One is they (Centre) don’t have the money to spend. You can’t do that when your economy is in a slump. Second is that just spending money is not enough. If you look at the result of DeepSeek, innovation is not proportionate to the amount spent,” he said. “There’s intellectual capital. Their (China’s) willingness to play around with new ideas, their willingness to think out of the box and all kinds of things go into it. That much DeepSeek has shown because Americans have spent far more money than China,” he added.

Economic professor at the Institute for Social and Economic Change (ISEC) Krishnaraj said that bigger private players should step up and spend more on R&D. “If you look at the R&D investment, only the government is contributing. However, the private sector, as per an economic survey, is reaping the profit. They’re earning more profit but part of it is not being used for research and development and technological innovation,” he said.

“So the government should make a policy just like CSR (Corporate Social Responsibility), they (Centre) should make them (private sector) set aside five per cent for technological innovation and research and development. That could be made mandatory. Therefore India is not a frontrunner on technological innovation. We always borrow technology like EV (Electric Vehicles) technology. Then we try to imitate them. That won’t help,” he added.