India Considers Local Storage of AI Models to Mitigate Risks and Prevent Data Outflow

India Considers Local AI Model Storage to Enhance Data Security

The Indian government is contemplating a significant policy shift towards local storage of artificial intelligence (AI) models. This initiative aims to mitigate risks associated with these models and prevent the outflow of sensitive data from the country. S Krishnan, Secretary of the Ministry of Electronics and Information Technology (MeitY), revealed this development while speaking on the sidelines of the Digital Threat Report 2024 for the BFSI sector 1

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Monitoring LLMs and Data Protection

Krishnan emphasized that the government is closely watching Large Language Models (LLMs) in terms of their usage and impact. The primary concern lies in data sharing through portals or mobile apps, which could lead to data leaving the country and potentially being used to train AI models abroad. By hosting AI models within India, the risks of data outflow can be significantly mitigated 1

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Digital Personal Data Protection Act

The government is also in the process of finalizing the rules for the Digital Personal Data Protection (DPDP) Act. Krishnan estimates that these rules may be in place within 6-8 weeks, playing a crucial role in preventing personal data leaks. The Act is expected to empower the government to restrict cross-border data transfers and mandate robust security measures for handling personal data 2

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Cybersecurity Awareness and Reporting

Krishnan noted an increase in cybersecurity incident reporting, indicating greater public awareness. This trend is viewed positively as it helps understand the extent and nature of cybersecurity problems. The rise in reporting also suggests improvements in the country's overall surveillance capabilities and capacity to detect incidents across the cybersecurity landscape 1

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India's AI Ambitions and Initiatives

The focus on localizing AI models aligns with India's broader ambition to establish itself as a global leader in AI while prioritizing national security. The government has introduced initiatives like the IndiaAI Mission to foster AI development through public-private partnerships, GPU procurement, and support for startups 2

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Impact on Global AI Companies and Indian Startups

The data localization requirements under the DPDP Act are prompting global AI companies like OpenAI, Microsoft, Google, and Amazon to consider setting up or expanding their local data storage in India. Meanwhile, India's homegrown AI industry has seen significant progress, with over 200 GenAI startups raising more than $1.2 billion since 2020. Companies like SarvamAI and Krutrim are developing Indic LLMs, while others like ObserveAI are leveraging AI for customized business solutions 2

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