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India Should Position Itself As AI Use Case Capital: Vijay Shekhar Sharma

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Reflecting on India’s position in the global AI race, Paytm founder Vijay Shekhar Sharma has said that the country should position itself as the “AI use case capital” rather than focusing on building foundational AI models like large language models (LLMs), given the high costs and infrastructure limitations.

As per an Outlook report, Sharma said this while addressing Shiprocket’s SHIVIR 2025: AI Commerce Edition – Made for Bharat in New Delhi today.

Flagging the high entry costs and lack of global infrastructure, Sharma said, “I always wanted India to have our own AI. The sadness is that the entry ticket of an employee is $100 Mn which is completely routed from here.”

Notably, India continues to trail the US and China in AI research spending, access to high-end hardware (such as GPUs), and availability of top-tier AI talent, despite capacity-building efforts like the government’s IndiaAI Mission, which has a corpus of INR 10,300 Cr.

Sharma also pointed out the disparity in access to capital and globally competitive talent as key challenges for India in the AI space.

Even if building large foundational models remains out of reach, he suggested that India could still make a mark by focusing on small language models and localised applications. He believes that India has the potential to lead in building highly relevant, use-case-driven AI models tailored to local needs.

On the company front, Sharma shared his vision to transform Paytm from a fintech company into an “AI-first” company. He revealed that Paytm is actively piloting AI-powered products and has begun partnering with major AI players.

While an ET report said that Sharma plans to pilot an AI-powered passbook that would send users a rap song of their monthly expenditure, the company has already partnered with Perplexity to integrate AI-powered search into its app earlier in February.

With its partnership with Perplexity, Paytm plans to offer AI-driven intelligence in mobile payments. The company is also adding an AI-powered search bar in its app, enabling users to ask questions and make financial decisions.

“Today, we are trying to learn what people are asking so that we can build a product in that direction. Some of the things you can soon expect us to launch include AI-first experiences in the app, which wouldn’t have been possible without a model running behind the scenes to answer those questions,” Sharma said in February.

Sharma, at SHIVIR, also acknowledged that AI’s impact on jobs is inevitable, as it becomes integrated into everyday workflows. He said that many human-led tasks would eventually be performed by AI, adding that companies may even start using AI as an employee or even as a CFO.

His comments come at a time when Paytm is inching closer to profitability.

In Q4 FY25, the company posted a consolidated net loss of INR 544.6 Cr. However, excluding an exceptional loss of INR 522.1 Cr incurred during the quarter, Paytm would have reported a loss before tax of only INR 19.9 Cr. Its operating revenue dipped 19% YoY but rose 5% QoQ to INR 1,911.5 Cr in the same quarter.

Even in the UPI space, Paytm retained its position as the third-largest playerafter PhonePe and Google Pay in May, with a nearly 7% market share and 125.75 Cr UPI transactions worth INR 1.38 Lakh Cr during the month.

In terms of its stock market performance, after the RBI’s crackdown on Paytm Payments Bank, which raised concerns over the company’s compliance and business continuity, its shares plunged to an all-time low of INR 377 on June 12 last year.

However, the company managed to stage a turnaround. By December 2024, Paytm shares had hit a 52-week high of INR 1,062.95. On a YTD basis, the stock has given a negative return of 4.40% against the Sensex’s positive return of 5.09% for the given period.

The post India Should Position Itself As AI Use Case Capital: Vijay Shekhar Sharma appeared first on Inc42 Media.

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