Tata Group chairperson Chandrasekaran predicts smaller AI models as the next big thing

CHENNAI: Tata Group chairperson N. Chandrasekaran anticipates significant investments in smaller, domain-focused artificial intelligence (AI) models, which he believes will have more relevance than large language models (LLMs). These smaller models consume less energy, are more cost-effective, and deliver faster results. He also emphasized the need to reduce energy costs and explore sources beyond solar and wind, such as small modular reactors (SMRs).

Speaking at NIT Trichy's global alumni meet, he said, “2023 showed remarkable hype or opportunity through LLMs. It became the most talked about word and it is no longer a buzzword. In 2024 we saw enormous opportunities with multimodal capability for the AI engines…I think 2025 is going to be the year where there is going to be a huge investment towards small language models.”

While LLMs will continue to play a role, Chandrasekaran stressed that small language models will have a deeper impact because they consume less energy, lower costs, and deliver faster results within specific domains. “I feel this is going to be a phenomenal year for AI,” he remarked.

Addressing global green energy transition challenges, Chandrasekaran noted that the world’s total energy requirement is increasing, driven by efforts to revive industrial growth and the rising use of AI and data centres.

He underscored the importance of reducing energy costs for economic growth. “In my view, the single most critical issue for global growth and prosperity is the cost of energy,” he said, adding that this would require significant investment and innovation in new energy forms, including SMRs.

It is worth noting that finance minister Nirmala Sitharaman announced the opening up of the nuclear sector for private investment. Presenting the 2024-25 budget, she stated that the government would partner with private players to establish Bharat Small Reactors and invest in research and development of SMRs.

Chandrasekaran further said, “I say this with conviction: India is perhaps the only country uniquely positioned to take advantage of and benefit from these three trends and transitions, coupled with geopolitics.”

State information technology minister Palanivel Thiaga Rajan also attended the event.