Inside Lenovo India's AI Strategy

In an exclusive interview with Dataquest, Shailendra Katyal, Managing Director of Lenovo India, discusses how the company is transforming its business to meet the evolving demands of AI infrastructure and enterprise solutions.

From Lenovo’s “pocket-to-cloud” strategy to leveraging government initiatives like PLI, Katyal shares insights into how the company is positioning itself in the competitive tech landscape. He also touches on the growing demand for high-performance computing, the role of GPUs in India’s digital transformation, and Lenovo’s focus on sustainability and energy efficiency. 

Excerpts:

Lenovo's AI Edge: India's Tech Leader Speaks

How is Lenovo positioning itself in AI infrastructure and enterprise solutions, and what sets the company apart?

Lenovo has evolved beyond just a PC company to a comprehensive solution provider, covering everything from servers and data centers to phones. Our "pocket-to-cloud" strategy integrates these technologies into a cohesive offering.

Globally, and in India, about 9-10% of our business comes from solutions. What makes Lenovo unique is our ability to integrate diverse technologies and solutions—unlike competitors who may be more fragmented.

We're working with 150-200 ISVs to build AI and generative AI solutions and see this as a transformative time, much like the early days of the internet. We're replicating our global strategy in India, with a focus on advanced manufacturing, design, and solution delivery.

How effective have government policies like PLI been for Lenovo's initiatives?

Government initiatives such as Digital India and PLI (Production Linked Incentive) have been extremely beneficial. Digital infrastructure like UPI and Aadhaar has been a major enabler, and the PLI scheme’s localization efforts have directly benefitted Lenovo.

We are active participants and beneficiaries of these programs. Though more demand-side support, like subsidies for classroom digitization, would help accelerate digital adoption, the policy clarity and stability have been commendable.

Are there any policy gaps in manufacturing and R&D that still need attention?

No significant gaps stand out. The government is focused on addressing large-scale challenges, such as the semiconductor shortage.

However, one area for improvement could be increasing digital penetration, particularly for students. The installed base of PCs for learners is only around 3 crore, out of 25 crore students. This is a space that could benefit from more policy attention and collaboration between ministries.

Lenovo is exporting devices from India. Can you provide a breakdown between domestic sales and exports?

Currently, we’re only exporting phones from India, but we plan to start exporting servers within the next 4-6 quarters. For PCs, our local production capacity is sufficient to meet domestic demand, and we haven’t yet decided on exports. India is emerging as an alternate global hub, and we expect exports to grow, starting with phones and later including servers and PCs.

Which markets are you serving through Indian exports?

Our exports are primarily targeted at North America, particularly for phones. As we develop our GPU capabilities, we expect to expand into additional global markets.

What's driving the demand for high compute and GPU capabilities in India?

Two main factors: First, India is generating 20% of the world’s data but has only 3% of its data center capacity, driving the need for more local data processing. Second, India is emerging as a cost-effective alternative for building data centers, thanks to available land, energy, and cooling infrastructure.

Which sectors will benefit most from GPU-based IT infrastructure?

The market for AI workloads is expected to grow, with a focus on three models: large models (cloud-based), private models (enterprise-owned), and personal models (on-device). We aim to provide solutions for all three models, leveraging our diverse product portfolio of phones, edge servers, PCs, and large GPU capabilities.

We see potential growth across sectors, as enterprises and individuals seek secure and responsible AI solutions for their specific needs.

When will your customers have access to the new phones, PCs, and servers?

Our AI-enabled phones are already available, and we launched new AI-enhanced PCs just last week, which will be on the market soon. The India-made phones, servers, and PCs will be available starting in Q1 2023.

High compute systems consume a lot of energy. What are you doing to improve sustainability and energy efficiency?

Cooling is a major area where we’re driving efficiency. Instead of using cold water cooling, we use warm water cooling, which saves significant energy. We also educate customers to avoid over-provisioning hardware. For instance, a customer needing a small language model doesn't need to invest in a large model, which would consume more power. Additionally, our consumption-based service model allows customers to scale up or down as needed without overcommitting to hardware.

What challenges do enterprises face when adopting high compute AI systems, and how can Lenovo help?

Key challenges include:

• Upfront investment: The cost of powerful AI systems can be prohibitive, especially for smaller businesses.
• Complexity: Integrating these systems with existing IT infrastructure can be challenging.
• Skills gap: There's a shortage of skilled professionals to manage these technologies.
• Data privacy: Concerns around handling sensitive data on public AI platforms.
• Uncertain ROI: Businesses sometimes struggle to see a clear return on investment.

To address these, Lenovo offers customized solutions tailored to individual enterprise needs and provides high compute AI systems via a consumption-based service model. This reduces upfront costs and lets companies scale at their own pace, while addressing concerns around data security and ROI.