The AI Revolution: Betting Big on AI Infrastructure and Vertical AI
Naimil Shah
OCT 25, 2024
The AI revolution is here, and it’s transforming industries faster than we could have imagined. Tasks that took a lot of time and manual effort are now done seamlessly at the click of a button. Take software testing for example, developers spend hours a week on unit testing and integrating testing. Today, solutions like Keploy using Gen AI to create tests on the go in your development environment, with high accuracy
The problems are more acute at an enterprise level and solutions more effective. We have seen up close how Pando is revolutionizing supply chain management with its AI-powered unified fulfillment platform. Working with global enterprises like Unilever, P&G, and Accuride, their platform uses machine learning to optimize freight sourcing, provide predictive ETAs, and automate invoice auditing
At Chiratae Ventures, we are diving headfirst into the AI wave, and today we want to talk about two areas we are excited about – AI Infrastructure and Vertical AI.
AI Infrastructure: The Backbone of the AI Revolution
Imagine trying to construct a skyscraper with nothing but hand tools and a rickety scaffold. That’s essentially where we are with AI right now. We have incredibly powerful AI models and applications, but the infrastructure to support them efficiently and at scale is still playing catch-up. While tech giants like Google, Meta, and Microsoft have the know-how and talent to build robust AI infrastructure, most enterprises venturing into AI for the first time face significant challenges.
Traditional businesses are striving to adopt AI but face significant hurdles. JPMorgan Chase is leveraging AI for fraud detection and personalized banking, while Walmart uses it to optimize supply chains. However, these initiatives demand substantial resources and specialized expertise, often beyond the reach of many organizations.
This gap is where we see a massive opportunity. We’re looking for the companies that will build the foundation and provide the tools for the AI skyscrapers of the future. We’re seeing the emergence of an entirely new ecosystem of AI-specific tools and platforms.
SimpliSmart is tackling the speed issue, helping businesses run their AI models faster and more efficiently, which means quicker responses for applications like chatbots or content generation tools.
TrueFoundry is making life easier for data science teams by offering a platform that streamlines the entire process from experimenting with AI models to deploying them in real-world applications.
Building infrastructure/platforms that enables people to bring their use cases to life is a key area of investment interest for us.
Specialized data management systems, particularly vector databases, are highly relevant today. In India, we see promising startups like VectorX developing a cutting-edge vector database optimized for AI workloads, offering fast similarity search and efficient storage for large-scale vector data.
Orchestration platforms for AI development streamline the deployment, scaling, and monitoring of AI models, enabling efficient management of multiple models and APIs through a single interface
Despite the rapid advancements in AI infrastructure, we believe there’s still significant white space for innovation as the field continues to evolve. New use cases are constantly emerging, driven by the increasing complexity of AI models and the diverse needs of different industries.
We’re excited about the potential for Indian startups to create world-class AI infrastructure solutions that can compete on a global scale.
Vertical AI: AI That Speaks Your Industry’s Language
While everyone’s been buzzing about general-purpose AI, we believe the next big wave of innovation will come from AI that’s tailored to specific industries. We do agree with the idea that, the future of AI is vertical!
Vertical AI is the next evolution in industry-specific software that’s not just automating tasks, but fundamentally transforming how businesses operate. Vertical SaaS laid the groundwork, proving the value of industry-specific solutions. Companies like Veeva Systems in life sciences and Procore in construction have become giants by deeply understanding and serving their target markets. The ability to combine workflows with payments created large outcomes from the likes of Zenoti and Toast.
But Vertical AI is taking this concept to an entirely new level, infusing artificial intelligence into the very core of industry operations. We’re seeing the emergence of an entirely new ecosystem of AI-powered, industry-specific tools and platforms. This is largely driven by a combination of AI agents which solve core operations in a sector. Where they are way more efficient and effective than humans is where the adoption will be driven the fastest.
Harvey AI is revolutionizing the legal industry. By leveraging large language models trained on vast legal databases, Harvey helps lawyers draft contracts, conduct legal research, and even predict case outcomes with unprecedented speed and accuracy.
Causaly is disrupting biomedical research with its AI-enhanced search platform. By analyzing millions of scientific documents and clinical trial databases, Causaly helps pharmaceutical companies answer complex research questions in a fraction of the time it previously took.
As these startups mature, new business models will also emerge. AI-augmented services are becoming mainstream, and most AI solutions are now moving towards outcome-based pricing.
By combining deep domain expertise with cutting-edge AI capabilities and getting the business model right, these solutions are poised to unlock unprecedented efficiencies and capabilities. As investors, we’re excited about the potential for Indian startups to create world-class Vertical AI solutions that can compete on a global scale.
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