Viability Gap Funding Helps Startups Raise GPUs – Technology News

The government is leaning on the private sector to build Graphics Processing Units (GPUs) and Central Processing Unit (CPU) capacity to build the much-needed computing infrastructure in the country.

This is an alternative to directly procuring GPUs and providing them to startups.The government has finalised a viability gap funding model that will subsidise up to 50% of computing costs for start-ups wanting to utilise GPUs and CPUs.

Of the Rs 10,000 crore India AI Mission, the Ministry of Electronics and Information Technology (MeitY) has allocated Rs 5,000 crore for building AI computing infrastructure in the country.

“We are opening tenders for procurement of computing. We are not buying chipsets and building publicly owned and publicly operated infrastructure,” said Abhishek Singh, additional secretary in the Ministry of Electronics and Information Technology. (MeitY).

“We want the investment to come from the private sector, but part of the cost of accessing that computing will be subsidised by the government,” Singh added.

The reason the government is not proceeding with GPU procurement is because there are a variety of GPUs and CPUs on the market. They serve a wide range of requirements, so it doesn’t make sense for the government to judge a startup’s needs based on what type of processor they need to run their AI models.

The government had previously also explored a voucher-based model, where startups could have been given access to computing infrastructure on an hourly basis; now, the same services are being offered by computing providers who have partnered with the government through a request for proposal process.

The government is considering building an infrastructure of 10,000 GPUs to begin with, and will gradually increase capacity.

MeitY has also developed a portal where computing providers will list the GPUs and CPUs available and their specifications.Startups can submit their applications through the portal and get the required processors after government approval.

Governments will also put in place certain standards and checks and balances to prevent misuse of computing infrastructure.

The request for proposals for computing infrastructure is expected to attract interest from companies such as Nvidia, AMD, Intel and Hiranandani Group-owned Yotta Data Services.

US-based Nvidia currently controls around 80% of the GPU market. Prices for high-end GPUs range from Rs 2-4 million per unit, making it difficult for start-ups without capital to invest.

“My understanding is that the government is considering purchasing (GPUs) from companies like Yotta and Microsoft on an OPEX (operating expenses) model.“We’re seeing a lot of different companies coming in, including some that offer it as a service,” said Sunil Gupta, co-founder and CEO of Yotta.

Gupta said buying chips for the government would be impractical because it would require complex data centers with 50 kilowatts of capacity per rack, a huge capital investment.

Yotta has procured 16,000 GPUs from Nvidia and is offering them to startups for $2.50 per hour.