India is poised to significantly enhance its graphics processing unit (GPU) capacity, nearly doubling it to 29,000 units as part of the ambitious National Artificial Intelligence (AI) Mission. This vital initiative, approved in 2024, comes with a substantial budget of approximately ₹103 billion over five years, aiming to fortify the nation’s AI capabilities.

This GPU expansion is a crucial step in India’s strategy to establish itself as a leading global AI hub by 2047. The initiative is expected to bolster economic growth, improve governance, and facilitate social progress by harnessing cutting-edge AI technologies.

Promoting an Inclusive AI Ecosystem

A key component of this mission is to create an inclusive AI landscape that nurtures students, startups, and innovators nationwide. By making advanced AI infrastructure more affordable and accessible, the initiative goes beyond catering to just a select few institutions.

Here are five companies that stand to gain from India’s GPU capacity expansion:

1. MosChip Technologies

MosChip Technologies stands at the forefront, offering comprehensive solutions in silicon design, verification, product engineering, and AI/machine learning. The company is well-positioned to thrive under the National AI Mission due to its focus on semiconductor design and AI engineering.

• Financial Overview (FY20-24):
  • Net Sales: ₹9.93 million in FY20, projected to reach ₹2.94 billion in FY24
  • Net Profit: From a loss of ₹460 million in FY20 to a profit of ₹121 million in the latest quarter

MosChip is expected to leverage the expanded GPU capacity to design and deploy AI models across various platforms, enhancing its market presence.

2. E2E Networks

Next up is E2E Networks, which specializes in cloud computing solutions featuring state-of-the-art GPUs like NVIDIA A100, H100, and H200. As the first Indian company to roll out large clusters of NVIDIA H200 Tensor Corps GPUs, E2E is well-equipped to cater to the growing demands of AI workloads.

• Financial Overview (FY20-24):
  • Net Sales: Increased from ₹251 million in FY20 to ₹2.95 billion in FY24
  • Net Profit: Rose from a loss of ₹94 million in FY20 to a profit of ₹219 million in FY24

E2E Networks is actively involved in government GPU tenders, ensuring a steady influx of projects that can enhance its cloud infrastructure.

3. Tata Communications

Tata Communications offers a comprehensive range of services, including cloud hosting and managed network solutions. The company is in the process of deploying one of India’s largest NVIDIA Hopper GPU-based cloud supercomputers.

• Financial Overview (FY20-24):
  • Net Sales: Projected to grow from ₹170.68 billion in FY20 to ₹209.69 billion in FY24
  • Net Profit: Experienced fluctuations, but is expected to rebound with a net profit of ₹10.4 billion in FY25

Tata Communications is also bidding for GPU supply contracts under the IndiaAI Mission, potentially driving substantial growth.

4. Rashi Peripherals

Rashi Peripherals plays a significant role in the distribution of ICT products, including GPUs and other essential components.

• Financial Overview (FY20-24):
  • Net Sales: Expected to increase from ₹39.36 billion in FY20 to ₹110.95 billion in FY24
  • Net Profit: Improved from ₹4 million in FY20 to ₹1.44 billion in FY24

With the government’s push for semiconductor manufacturing, Rashi is poised to benefit from increased focus on local production and R&D investments.

5. Orient Technologies

Orient Technologies specializes in IT solutions, providing comprehensive services in cloud, cybersecurity, and data center management to various sectors.

• Financial Overview (FY21-24):
  • Net Sales: Increased from ₹247 million in FY21 to ₹602.9 million in FY24
  • Net Profit: Grown steadily, reaching ₹126 million in the latest quarter

The company aims to leverage the burgeoning demand for GPUs to provide AI-enabled IT solutions, significantly enhancing its market reach.

Conclusion

India’s ambitious initiative to nearly double its GPU capacity under the National AI Mission promises widespread benefits across various sectors, including healthcare, education, and finance. Enhanced GPU resources will empower businesses to implement AI-driven solutions for diagnostics, personalized services, and operational automation.

As the landscape for cloud computing and IT infrastructure evolves, companies involved in GPU services stand to gain from the increasing demand for these technologies. This strategic move not only strengthens India’s computational capabilities but also fosters a vibrant, self-sustaining tech ecosystem.

Investors are encouraged to assess the financial health, governance practices, and market valuations of these companies to make informed decisions.

Happy investing!