The Dialogue’s study finds open source AI driving Indian market growth, though data standardisation and talent gaps remain critical challenges.
On 20 August 2026, tech think tank The Dialogue published a study showing that over 79% of surveyed developers view open-source models as a full or partial substitute for proprietary AI alternatives. According to the report, 62.2% of developers rely heavily on open-source tools, indicating that competition in India’s AI market is driven by open solutions that lower entry barriers and reduce startup dependency on single providers.
The study highlighted data usability and talent shortages as primary growth bottlenecks rather than raw compute availability, pointing to a potential gap between infrastructure availability and resource usability. While 74.5% of the respondents stated that they had an adequate range of compute choices, only 15% find government datasets easy to access whilst 63.2% identified data standardisation as their biggest data-related challenge.
Further, 47.2% of the respondents highlighted skills gaps as a significant impediment to overall competitiveness. The report recommends that investment in AI skilling, workforce development, and talent mobility must be prioritised as enterprise adoption intensifies. However, businesses and consumers are already reaping rewards in terms of tangible commercial benefits beyond experimentation.
Overall in The Dialogue’s study, 85% of surveyed businesses reported positive outcomes, with 61% noting better decision-making, 55% citing faster delivery times, and 67% finding costs reasonable relative to the value generated. On the consumer side, 79% reported improved digital experiences (74% specifically noting improved user experiences from service integration), and 62% found it easy to switch between services, despite ongoing concerns regarding data use and ecosystem dependence.
