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India stood fifth in terms of investments received by startups offering artificial intelligence (AI)-based products and services last year, according to Stanford University’s annual AI Index report.

India received $3.24 billion in total investments in AI startups in 2022, outpacing nations like South Korea, Germany, Canada, and Australia. The US, China, UK, and Israel are among the nations that are listed before India. 

The Index additionally shows that India was the sixth-largest nation in terms of AI investments between 2013 and 2022, with funding for AI companies totalling $7.73 billion over the past ten years. This investment was made last year to the tune of about 40 per cent. 

The conversational AI firm Uniphore, based in Chennai, raised $400 million in a Series-E Round last year, raising its valuation to $2.5 billion, making it the most valuable AI startup in India. Mad Street Den, an AI company with offices in Chennai and the US, raised $30 million in a Series C round headed by Avatar Growth Capital, making it one of the year's largest fund raises. 

Despite the fact that the economic downturn has reduced investment in AI globally since 2021, experts predict a surge in venture capitalist (VC) financing this year, especially in light of the enormous demand for generative AI products like OpenAI's ChatGPT among both companies and customers.  

“Given the unprecedented interest and the increasing industry sentiment that it is a step change in AI capabilities, I expect VC investments to gather pace in the coming quarters,” said Kashyap Kompella, an AI analyst and chief executive of research firm RPA2AI, who spoke to Tech Circle. 

Several Indian companies, including Flipkart and MakeMyTrip, are studying the usage of generative AI models in their products, as Mint previously reported. Startups like GupShup and Exotel have also unveiled systems for building chatbots that are similar to ChatGPT and are powered by OpenAI's GPT models.

Furthermore, according to the Stanford survey, 54 per cent of the researchers working on large language models (LLMs) were affiliated with American universities. But last year, scientists from Canada, Germany, and India made their initial contributions to the creation of LLMs.