FM Sets Aside ₹500 Crore for AI Centre of Excellence

In line with the Centre’s commitment to enhancing India’s AI capabilities and formulating a plan to develop large language models (LLMs)—particularly in the wake of Chinese technology start-up DeepSeek shaking up the tech world by releasing automated chatbots at a fraction of the cost of American heavyweights in the sector—the Union Budget made the right noises.

Union Finance Minister Nirmala Sitharaman announced the establishment of three Centres of Excellence (CoE) in Artificial Intelligence (AI) for education, with an outlay of ₹500 crore. “I had announced three Centres of Excellence in Artificial Intelligence for agriculture, health, and sustainable cities in 2023. Now, a Centre of Excellence in Artificial Intelligence for education will be set up with a total outlay of ₹500 crore,” she said in her speech.

Before her announcement, Union IT Minister Ashwini Vaishnaw stated that the country would create its own foundational LLM model in the coming months. “Making modern tech accessible to everyone—that is the economic vision of our Prime Minister… Ours is the most affordable ccomputing facility at this point,” Vaishnaw said on 31 January, a day before the Budget.

He also noted that, compared with global models where computation costs reach 2.5 to 3 dollars per hour, India’s AI model computation would cost less than ₹100 per hour, thanks to a 40% government subsidy. He further stated that multiple foundational models for the “Indian context, in Indian languages” would be ready later this year—something he emphasised would help “researchers, students, and the general public due to its low cost, fast computing, and prompt results”.

He reasoned that within just ten months of the launch of the India AI Mission, the Ministry of Electronics & Information Technology “has been able to generate an unprecedented response and establish a high-end and robust common computing facility with approximately 18,693 Graphics Processing Units (GPUs)”.

Meanwhile, several industry experts believe much more needs to be done to place India on the global LLM map. Ritesh Bhatia, founder of Mumbai-based V4WEB Cybersecurity, told Open that he had expected specific announcements on LLMs in the Budget. “The point is, we did well in IT but lost out in cybersecurity and cloud applications. We must not allow ourselves to miss the bus in generative AI and must compete relentlessly to play a leadership role in AI. This is also the right time for more public-private partnerships in the sector. Perhaps the Finance Minister’s announcements regarding SMEs may provide some support, but to move forward in this field, we need a far more focused approach,” he said.

 

AI Centre of ExcellenceFinance Minister Nirmala SitharamanGPUsLLMsMSMEUnion Budget 2025