India has $20 billion of venture capital dry powder, and “the number one theme that we're all going after is AI,” Peak XV Partners managing director Rajan Anandan said, adding that AI innovation will be used to solve problems faced by large companies globally.

Laying down the investment thesis for artificial intelligence (AI) companies, Anandan said there were three broad themes the investor is chasing.

These include startups building AI-first tools and products for large enterprises, vertical AI applications for sectors such as healthcare and financial services, and building applications for business software in categories such as sales, marketing, finance and HR-tech.

Anandan was speaking at the Global Partnership on Artificial Intelligence (GPAI) Summit in New Delhi.

“We think that over the next 15 to 20 years, India will have at least 50 new companies of over billion dollars (in valuation) that are going to solve problems of the largest companies around the world with AI first products and services,” he said. “We think there's going to be hundreds of companies in this AI tooling and infrastructure.”

The second area Anandan spoke of was vertical AI applications. “We think that just the US healthcare sector can lead to hundreds of new Indian innovators that are going to focus on different aspects…same thing will happen in retail in financial services and the list goes on,” he said, citing examples of Peak XV’s investee companies including Arintra and Redbrick.AI, which are working on solutions in the healthcare space.

The third area is business software. According to Anandan, “AI has the potential to reimagine and transform categories like sales, marketing, finance, and HR tech”. He said that current business software such as Salesforce will “probably be the first one to be reinvented using AI”, adding that there was space for startups to build AI solutions for these areas.

Lastly he emphasised on foundation models, where he said that some of the larger companies in the space building large language models (LLMs) such as OpenAI, Google, Amazon will have a head start, but said that he expects Indian startups having unique opportunities to develop foundational models.

Peak XV Partners recently participated in the $41 million funding round of Chennai-headquartered generative AI startup Sarvam AI, along with Lightspeed and Khosla Ventures. Sarvam AI is working on developing language models for Indian languages.

On Wednesday, Sarvam AI announced the unveiling of its first Hindi-based LLM called OpenHaathi, which is built on top of Llama 2, the open source language model developed by Meta, in partnership with Microsoft.