One Thing Today in Tech One Thing Today in Tech

India’s efforts to build core AI technologies is at best at a nascent stage. At the country’s biggest tech industry lobby Nasscom’s annual flagship conference last week, we caught up with Debjani Ghosh, the organisation’s  president, for a quick chat on the topic. Ghosh spoke about how India’s tech services companies are approaching the AI opportunity, including lessons from India’s experiment with its digital public infrastructure.

India’s top IT companies might benefit as their biggest customers look to sunset legacy applications that are only being maintained for the critical data they hold, but first a couple of other headlines that caught my attention: 

One97 Communications Ltd., which operates the Paytm wallet and payments network, has formed a committee, headed by Meleveetil Damodaran, the former chief of the Securities and Exchange Board of India, the country’s capital markets regulator, to help the company meet compliance requirements.

On Jan. 31, the Reserve Bank of India, ordered the company’s Paytm Payments Bank unit to cease most of its operations after Feb. 29 for various regulatory violations.

The three-member committee includes Mukund Manohar Chitale, a former president of Institute of Chartered Accountants of India (ICAI), and Ramachandran Rajaraman, a member of the Advisory Board at Central Vigilance Commission.

Meanwhile, India’s parliamentary committee on communications and IT has urged the central government to support the growth of domestic fintech players as alternatives to the duopoly of PhonePe, a unit of Walmart, and Google Pay which accounts for more than 83 percent of India’s digital payments transactions via the unified payments interface, TechCrunch reports.

PhonePe leads, with 46.91 percent of the UPI market share by volume for the period of October to November 2023, the committee notes in its report. Google Pay held a market share of 36.39 percent in the same period.

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India’s IT services companies will likely benefit as their customers take a hard look at outdated software applications in the age of AI. Many of these applications are being maintained only for the data they hold, the consultancy ISG points out in a recent newsletter.

Enterprises have large volumes of critical data locked in legacy applications, ISG’s Stanton Jones, Sunder Sarangan and Alex Bakker, note in the company’s weekly newsletter, Index Insider, with the tagline what’s important in IT.

AI will be a forcing function for businesses to overcome the reasons that have been preventing them from sunsetting or modernizing these applications, which will serve as an important driver for ADM activity this year, they write.

ISG’s most recent Application Development and Maintenance Buyer Behavior Study showed that about one in every ten enterprise applications has been classified as “end of life.”

Most large enterprises have thousands of applications, so in most cases, this means that hundreds of applications are at the end of their life for any one company, they point out.

And, the primary reason companies continue to support these legacy applications is because of the data they hold.

According to ISG, 10 percent of enterprise applications being at end of life translates to more than 150 applications on average per company. Half of all enterprises ISG surveyed continue to support these applications because of the data stored in them.

ISG, which tracks all IT outsourcing contracts worth $5 million or more, expects enterprises to double the number of AI-enabled applications in their portfolios by the end of 2024.

This means that application optimization will be an important attribute of ADM activity in 2024. Companies will rely on their outsourcing providers for the resources required for these legacy transformation programs as well as their ability to combine cost optimization with modernization, according to the consultancy.

Even in regions like the Asia Pacific, where companies currently lag their North American counterparts in GenAI spending, for example, Infosys, India’s second biggest IT services provider, forecasts a bigger increase than in any other region – 140 percent in the next year.

This translates to an estimated $3.4 billion to be invested across Australia, New Zealand, China, Japan, India, and Singapore, according to Infosys’s Generative AI Radar APac Report, released two weeks ago.

Google is retiring Bard, with the launch of a more capable chatbot, Gemini Advanced, but first a couple of other headlines.

Reserve Bank of India, the country’s central bank, yesterday, stood by its actions imposing restrictions on Paytm Payments Bank, stating that its order barring the small finance bank from most activities after Feb. 29, including taking any fresh deposits, was issued only after “persistent non-compliance” with rules.

The action taken by the powerful banking regulator “is always proportionate to the gravity of the situation,” the bank’s Governor Shaktikanta Das, said in a media briefing, TechCrunch reports.

Amazon Web Services India has started a space accelerator programme that will offer technical, business, and mentorship help to startups focused on space technology, with support from, T-Hub, and Minfy, an AWS systems integrator partner.

This is AWS’s first accelerator program in India focused on startups in the space sector, and follows the MoU it signed with ISRO and IN-SPACe in September last year, to nurture startups in space-tech, and support innovation in the sector.

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A year after introducing Bard, Google is retiring the name and rebranding its AI products and features under its Gemini brand. It is also launching Ultra 1.0, its most capable large language model yet.

“AI is also now central to two businesses that have grown rapidly in recent years: our Cloud and Workspace services and our popular subscription service Google One, which is just about to cross 100 million subscribers,” Google and Alphabet CEO Sundar Pichai, writes in a blog post.

“Gemini is evolving to be more than just the models,” Pichai writes. “It supports an entire ecosystem — from the products that billions of people use every day, to the APIs and platforms helping developers and businesses innovate.”

The largest model Ultra 1.0 is the first to outperform human experts on MMLU (massive multitask language understanding), which uses a combination of 57 subjects — including math, physics, history, law, medicine and ethics — to test knowledge and problem-solving abilities.

Gemini is available in 40 languages on the web, and is coming to a new Gemini app on Android and on the Google app on iOS.

The version with Ultra will be called Gemini Advanced, which is more capable at reasoning, following instructions, coding, and creative collaboration.

“In blind evaluations with Google’s third-party raters, Gemini Advanced with Ultra 1.0 is now the most preferred chatbot compared to leading alternatives,” Sissi Hsiao, vice president and general manager for Gemini and Google Assistant, wrote in a blog post.

With the Ultra 1.0 model, Gemini Advanced is more capable at complex tasks like coding, logical reasoning, following nuanced instructions and collaborating on creative projects, Hsiao writes. Gemini Advanced allows you to have longer, more detailed conversations, and it also better understands the context from your previous prompts.

Gemini Advanced can be a personal tutor, help with more advanced coding scenarios, or generate fresh content. Gemini Advanced is available today in more than 150 countries and territories in English, as part of a new Google One AI Premium Plan for about $20 a month, with all the existing features of the Google One, including the 2TB of storage. In addition, AI Premium subscribers will soon be able to use Gemini in Gmail, Docs, Slides, and Sheets. And Google is offering a two-month free trial.

“To mitigate issues like unsafe content or bias, we’ve built safety into our products in accordance with our AI Principles,” Hsiao writes in her post.

You can find more details in Google’s updated Gemini Technical Report.

Gemini and Gemini Advanced are being rolled out on smartphones via a new app on Android. And in the Google app on iOS in the coming weeks.

Layoffs at tech companies have continued into 2024, but first, a couple of other headlines that caught my attention.

Hyundai Motors is planning to list its Indian unit to raise at least $3 billion in what would be the country's biggest IPO, Reuters reported yesterday, citing two people it didn’t name.

Hyundai, the second-biggest automaker in India with a 15 percent market share, is in early talks with several banks for the fund raising, which would value the Korean automaker’s Indian operations at up to $30 billion, which is more than half its market capitalisation of $42 billion in Seoul, according to Reuters.

As Paytm reels under the Reserve Bank of India’s tough stance over the fintech company’s non-compliance issues, some founders of startups in India have written to Governor Shaktikanta Das and finance minister Nirmala Sitharaman, urging them to “review” and “reconsider” the regulatory directive asking Paytm’s payments bank unit to shut its main banking services after February 29, Economic Times reported earlier today.

Policybazaar's Yashish Dahiya, Bharat Matrimony’s Murugavel Janakiraman, Makemytrip’s Rajesh Magow and Ritesh Malik of Innov 8 are among the signatories to the letter. They’ve said the punitive measures against Paytm would have a far-reaching impact on India’s fintech ecosystem, according to ET.

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Tech companies have already shed about 32,500 jobs in 2024, according to layoffs.fyi, which tracks job cuts at 5,000 tech companies. Snap, which operates the photo and video sharing app, Snapchat, is the latest internet company to announce job cuts in 2024. The company said in an SEC filing on Feb. 5 it would reduce its headcount by 10 percent worldwide.

Snap expects it will incur charges ranging from $55 million to $75 million, according to its filing, from this latest round of cuts. The company previously laid off 20 percent of its staff and restructured its business lines in August 2022, CNBC notes.

Several other well-known tech companies have reduced their staff strength this year, including Paypal, Microsoft, Zuora, Zoom, and Okta. Indian food delivery unicorn Swiggy, ahead of its IPO plans, recently cut another 400 jobs, TechCrunch reported on Jan. 25.

And India’s top IT services companies entered the year with their collective workforce lower by tens of thousands of employees. Tata Consultancy Services, India’s biggest IT company, for example, reduced its workforce by close to 11,500 people in the nine months through December 2023.

Infosys, the second biggest, has reduced its workforce by more than 20,500 staff in the same period.

Tech and IT companies around the world recruited aggressively as the world came out of the Covid pandemic. Since then, the combination of the global economic slowdown and the rise of AI and AI-based automation, has changed the world. Now, even as things are beginning to look up in the world’s biggest tech market, the US, hiring will increasingly reflect investments in AI.

Apple’s Vision Pro headsets are now available for sale at stores in the US, but first a couple of other headlines that caught my attention.

A UK minister on a trade mission last year assured Infosys that he would do what he could to help the company grow in the country, where founder NR Narayana Murthy’s son-in-law Rishi Sunak is prime minister, The Mirror reported.

The paper obtained details of the April 2023 visit of Dominic Johnson, a minister in PM Sunak’s cabinet, using Britain’s freedom of information laws. Sunak has faced intense scrutiny over his wife Akshata Murty’s ownership of close to 1 percent of Infosys. 

Freshworks, a Chennai-to-Silicon Valley software company, will report its fiscal fourth quarter and full year earnings results tomorrow, according to the investor page on the company’s website. The Nasdaq-listed provider of cloud software for customer engagement and IT services management expects to end the year with revenue of about $595 million, a growth of about 20 percent. Analysts will also be watching Freshworks’s net dollar retention, an important SaaS metric, that the company has projected at 105 percent.

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Apple, on Feb. 2 announced that its Vision Pro AR headsets were available for sale in stores in the US. Apple calls the headset a spatial computer, which works by tracking natural hand gestures and movement of your eyes.

Last year, after Apple unveiled this, I’d spoken with Milind Manoj, an AR expert and founder and CEO of a company called PupilMesh here in Bangalore. I thought a quick recap of the features of the Vision Pro from that conversation might be interesting, so here goes.

The first takeaway was that, like with any other Apple product, there's a lot that’s gone into the design and specs. Especially given that they have a dedicated processor, the R1 chip, that helps to make functions like the display rendering seem like near real time although it's a pass-through headset, is remarkable.

In a pass-through headset, one is not really seeing the world around directly, but through the cameras on the headset, and then being streamed to the display. This is an interesting, and important, question according to Milind, because the user is seeing what the device sees.

Therefore, the question is if you’d be okay with a device controlling what you are actually seeing because you are essentially blocking out one of your senses and relying on cameras – this might be okay or not, depending on what you’re using the device for.

This is the biggest difference versus what are called optical see-through headsets which don’t block off your vision. These kinds of headsets will become increasingly important as the sophistication of AR applications that overlay digital information on top of the real world that we can see and touch and feel increases – think of applications like surgery, for example, where precision is critical and therefore what you’re seeing through the headset has to be accurate.

The original Apple Glass project probably had such ambitions, where one could see through. Apple must surely be continuing to work on that technology, but we don’t know anything about a commercial product.

The second takeaway from my chat with Milind was that unlike other Apple products so far, the Vision Pro still feels a little bit experimental, especially because it has a waist-mounted external battery pack that connects to the headset via a cable.

This is obviously the best trade off that Apple’s engineers could think of with respect to the design and how long people could use the headset at one go, but it does make the Vision Pro a somewhat inelegant gadget in my view – you may be perfectly fine with an outside battery pack.

The headset costs about $3,500 and its success will depend on the applications that developers come up for it. It’s unlikely to be in India any time soon, but Apple will probably show off the headset at its own stores in Mumbai

Apple’s focus on India is paying off and the company also captured the top position in revenue in a calendar year for the first time, due to strong demand for both its latest iPhone and older models, according to market research provider Counterpoint. Overall, Samsung maintained its lead with the biggest market share, at 18 percent, in the predominantly Android market, and Vivo took the number two spot with 17 percent share.