Viability gap funding for startups to procure GPUs – Technology News

In a bid to create the much needed compute infrastructure in the country, the government is banking on the private sector to create the capacity of graphic processing units (GPUs) and central processing units (CPUs).

This means that instead of directly procuring the GPUs and giving it to startups, the government has finalised a viability gap funding model, wherein it will subsidise compute costs up to 50% for startups who want to utilise GPUs or CPUs.

Of the Rs 10,000 crore IndiaAI mission, the ministry of electronics and IT (MeitY) has earmarked Rs 5,000 crore to create AI compute infrastructure in the country.

“We are in the process of floating the tenders for procuring compute. It is not that we will buy chipsets and build a public owned, public run infrastructure,” said Abhishek Singh, additional secretary at the ministry of electronics and information technology (MeitY).

“We will want the investments to come from the private players, but part of the cost of access to that compute will be subsidised by the government,” Singh added.

The reason behind the government not going ahead with procuring GPUs is because there are a variety of GPUs and CPUs in the market catering to different requirements. Therefore, it does not make sense for the government to judge the need of the startups on what kind of a processor they need to try and run their AI models.

Earlier, the government was also exploring a voucher-based model, wherein they could have provided access to compute infrastructure to startups at an hourly rate as well. Now, the same services can be provided by compute providers, empanelled with the government after the request for proposal process.

The government is looking at creating an infrastructure of 10,000 GPUs initially for which it will create the capacity in phases.

MeitY will also develop a portal, wherein the compute providers will list the GPUs and CPUs available and their specifications. Through the portal, the startups can submit their applications and get access to the required processor after the government’s approval.

The government will also have certain criteria and checks and balances in order to avoid misuse of the compute infrastructure.

The request for proposal for compute infrastructure is expected to see interests from companies like Nvidia, AMD, Intel, and Hiranandani group-owned Yotta Data Services.

US-based Nvidia currently dominates the GPU market with an about 80% share. The price of high-end GPUs is in the range of Rs 20-40 lakh a unit, making it difficult for startups to invest into the same in absence of funding.

“As per my understanding, the government is talking about taking (GPUs) on an opex (operating expense) model from somebody like Yotta or a Microsoft, etc, who will give it on as-service model,” said Sunil Gupta, co-founder and CEO of Yotta.

According to Gupta, it is not feasible to buy chips for the government because then there will be a need for complex data centres with 50 kilowatt per rack capacity, which will involve a huge capex.

Yotta has procured 16,000 GPUs from Nvidia and is providing them at an hourly rate of $2.5 to startups as well.