In a recent interview, World Bank President Ajay Banga said India will find success in ‘small’ AI models that the ‘aam aadmi’ or farmers can use rather than the large language models developed by giant corporations using huge investments. How does this fit in with the theme of your address?

It’s clear that the large language models, including the infrastructure or the data sets, are dominated by a few people. It is not practical or realistic to assume that a country like India can start owning or controlling any of those. But, in my view, more important is the question of who shapes the applications that run on those models? Who manages the governance? Who drives the deployment? India can play a role there. And, increasingly, at least in the short term, there is a recognition that the use cases will be much narrower, domain-specific.

And that’s where it may be possible to develop small language models targeted at specific use cases. A targeted small language model in a certain domain could actually outperform a general purpose large language model. And yes, there is significant opportunity in spaces like agri services that you’ve mentioned. That’s actually already happening today. The government of Maharashtra has started Mahavistaar, which is nothing but an agri-services digital platform for farmers. Even the FM mentioned it in her Budget — Bharat Vistaar, which is scaling up this pilot for farmers across the country.

In a recent interview, Prof Vijay Govindarajan said that while the internet was a revolution, it was the Airbnbs, Amazons and Ubers of the world, which built the apps using the internet, that had greater value for customers. So, perhaps the same could be happening?

We have to start thinking of AI as a public good, like electricity or roads. But on that highway, you have to allow private innovation. People will then find a way to develop applications. And because it’s a public good, it will give everyone access... a student, entrepreneur, or an SME... I think the people who develop the applications that add real utility to business enterprises or society at large will create the value.

Does it mean India shouldn’t be overly concerned about not being part of the AI development game and just look at creating value from the foundations being built?

For any country to assume it will be wholly self-sufficient in terms of technology and its development is probably unrealistic and, in my view, even unnecessary. Because what matters more than the foundational model is who shapes the applications, who drives the deployment, who controls the governance. And as long as we do that, I think we have a great chance of leveraging AI for the common good. There are many examples. We didn’t invent the computer. But we leveraged the computer better than many other people, creating a very vibrant IT services industry, which gives employment to over five million people — a cornerstone of our economy, pride for our nation. Our goal must be to leverage AI and see how it can serve our needs.

What would you say are the threats from AI? There’s talk that it can dominate our lives excessively?

There are several risks. I will mention just a few, in no particular order. There is the threat that we all see every day, namely the cost of deception has come down. Deep fakes can convincingly impersonate everyone. There are many documented cases where employees have transferred large sums of money based on instructions they got over a video call. Everything felt real. But the faces, the voices, were fake instructions. There are risks which are even more insidious, because you won’t realise it. And there are risks associated with biases, because AI is basically training computers based on historical data. And history has inbuilt biases. And those prejudices of the past are getting embedded into these models. And these models will be scaled up and automated. And that can systematically disadvantage certain sections when you start using them for things such as screening for jobs or credit assessment. Then there’s a fear that AI will eliminate several jobs. That’s a real concern, especially in a country like India.

Generative AI is now threatening the foundational model of the software industry, which may impact business models and result in job losses?

Every day we hear of some new development. The only thing we can say is it’s moving at a rapid pace, it will touch parts of almost every job. It requires all of us not to resist it, because you can’t. It’s all-pervasive and the train has left the station. But it will also create many new opportunities. The question is how do we adapt to this and get ready. And that will require re-training the current workforce and building a talent pipeline more ready for the AI world. This is a massive task, and institutions will need to play a role in driving reskilling at scale, creating safety nets, and supporting the transition to this new world.

What is your observation of AI in your industry — consumer goods? How is it leveraging AI?

Every company I know of is engaged with the possibilities that this disruptive technology brings with it. Several initiatives leveraging AI are being tried across the spectrum. Whether it’s in supply chain, R&D, or marketing. And many are showing good results. And that will continue. Stitching it all together at an enterprise level is a little more challenging.

Many of today’s senior leaders probably did their MBAs in the ’90s. There was a phase when people said the leaders have to come up to speed in digital technologies and now, before you know it, it’s AI. How are business managers coping?

Well, either find a way to learn and adapt, or you’ll become irrelevant. That’s the simple truth. As always, there are early adopters, and there are laggards. There are some people who embrace this, and there are some who don’t. But my message to everyone is that this is not going to go away, this will only accelerate. The sooner we recognise it and the sooner we start building appropriate skills and capabilities, the better off we will be. This applies at individual as well as enterprise level.

Apart from AI, what are the big challenges that business leaders face today?

I think AI is just one extreme example. But the challenge that leaders face is in dealing with a world which is extremely uncertain and volatile. This was true 10 years ago and is true today. The only difference is that the level of uncertainty, volatility and pace of change has gone up dramatically. I don’t think we could have visualised this 10 years ago. The AI revolution today is just another example of how rapid that change can be. And dealing with that and making sure that the company and its business model remain relevant, its capabilities and people remain relevant, is the defining challenge of our time. Because the moment you lose relevance, it is a sure sign of slow but certain death. And that’s really the challenge that people have to deal with today.

Moving from AI to leadership, HUL has always been known as a school for CEOs. What is the secret sauce?

It really starts with the deep belief that people are our strongest asset. And to run a successful business we need high-quality people and an enabling culture. It’s also not something recent. It’s been a consistent theme for decades. There was an early realisation that to run a successful business in a complex and diverse country like India, you need people who understood India and were in touch with its cultural ethos.

And so, even before business schools existed, the company scouted for the best talent and groomed them. All our training and development systems came about because there was a need to train people. The fact that we had the first Indian chairman in the early 1960s is evidence of this. That sort of long-term commitment to recruiting the finest talent, training them, throwing them into the deep end, testing what they are capable of, and supporting, mentoring and challenging them has helped create the company that it is today. And over a period of time, this becomes deeply ingrained in the DNA of the organisation. As we keep saying, leaders build leaders. If you’re a leader of the organisation, it is a part of your job to be able to identify and mentor talent.

And that obsession continues. There may have been, maybe in the last 20 years, two or three years when we may not have been the employer of choice. And on those rare occasions, hell would break loose, trying to understand what needed to be done to restore our position. Because if we lose our ability to attract the finest talent, it won’t impact the business today, but will compromise us 5-10 years later.

There was also a focus on embedding the right values and creating an enabling culture that cared for people and was deeply meritocratic. And that combination, I think, has served us well thus far.