Two years after his dismissive stance on India's AI potential raised eyebrows here, OpenAI CEO Sam Altman on Wednesday gave a ringing endorsement to Artificial Intelligence momentum in the country -- and billed India as an important market not just for the new-age technology itself but for the ChatGPT creator as well.
In New Delhi on Wednesday, Altman -- while sharing dais with Union IT minister Ashwini Vaishnaw -- said India is the second biggest market for the company and that Open AI had tripled its users here in the last year.
He made the most of his whirlwind tour to India, meeting industry captains including Paytm Founder-CEO Vijay Shekhar Sharma, Snapdeal co-founder Kunal Bahl, Unacademy CEO Gaurav Munjal, Ixigo Group CEO Aloke Bajpai, Filmmaker Shekhar Kapur, Peak XV managing director Rajan Anandan, and partner at leading venture capital firm Accel Prayank Swaroop.
Altman during his first visit to India in June 2023 had called India's ability to develop a foundational model similar to OpenAI's ChatGPT "totally hopeless" and a few days later had clarified that his point was about the difficulty of competing with established AI giants on cost-efficient foundational models.
Altman's visit comes days after the finance ministry directed its officers not to download or use AI tools and apps such as ChatGPT and DeepSeek in office computers and devices, saying they pose confidentiality risks to data and documents.
In response to a question on his view on development of low-cost foundational models, Altman said that's a reference to a comment he made in India a few years ago.
"That was a very specific time when there was a certain scaling thing. I still think that to stay on that frontier of pre-training models is expensive.
"We are now in a world where we made incredible progress with distillation.
"These reasoning models in particular, it's not cheap. It's still expensive to train them, but it's doable.
"I think that's going to lead to an explosion of really great creativity and India should be a leader there," he said.
Many believe that China's DeepSeek AI platform developed with $6 million investment is based on "distillation" of foundational AI models but there is no clear evidence available.
Altman said India is an incredibly important market for AI in general, for OpenAI in particular.
"It's our second biggest market. Tripled users here last year, but mostly seeing what people in India are building with AI at all levels of the stack, chips, models, you know, all of the incredible applications. I think India should be doing everything. I think India should be one of the leaders of the AI revolution," he said.
To assuage the pricing debate triggered by China's DeepSeek AI platform across the industry, Altman attempted to address the curiosity of stakeholders with projection that the cost of intelligence unit in development of AI technology will drop about 10 times after a year.
Altman said there has been incredible development of technology in India where the company has tripled its user base last year and sees the country as one of the leaders in the AI revolution.
He said the cost of developing model models in AI is still not cheap but there has been a lot of progress in AI that will require less hardware and the rest of it can be used for other purposes.
"The cost for a given unit of intelligence, one year later, seems to fall by about 10x," Altman said.
Intelligence unit in AI platform development generally refers to a module that uses some input, processes it and gives an output generally based on the pattern in which they are trained or configured.
Altman said Moore's Law predicted that there will be a two-times increase in the number of transistors on a chip every 18 months and that has changed the world.
"But what's happening with the reduction in cost in AI models is extraordinary now, not only does it mean that the world is going to need less AI hardware, because you bring the cost down, they are going to use it for a lot more things," Altman said.
OpenAI has invested billions of dollars in the development of its foundational AI models and ChatGPT applications are being widely used in India.
OpenAI has set up a new company, The Stargate Project, in which it intends to invest $500 billion over the next four years building new AI infrastructure for OpenAI in the United States.
China-based DeepSeek last month rolled out an open source AI platform offering similar service as ChatGPT with claims that it has invested only $6 million in the development of technology.
Deepseek overtook ChatGPT as the top-ranked free app on Apple's App Store, as the US tech industry -- that has long-justified injecting billions of dollars into AI investments -- watched in sheer disbelief last week.
AI chipmaker and Wall Street superstar Nvidia shed $590 billion in market capitalisation last Monday, suffering the single greatest one-day value wipeout of any firm in history.
In total, the shockwave sent out by DeepSeek development cost revelation is estimated to have shaved off around $1 trillion in stock valuation of US companies.
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