India should benefit from using new technologies like Chat GPT: Narayana Murthy

“Well I am first an Indian citizen and then a tech entrepreneur so therefore I would want India to make tremendous progress, not just in IT but in every sector,” says NR Narayana Murthy, Founder, Infosys.

What about manufacturing as an industry because a lot of people are saying that manufacturing is positioned the way services was 40 years ago and it could perhaps be the sunrise sector for the next 40 years. What is your take with respect to what is happening on the policy action and how manufacturing is placed?
Well, I would not claim to know manufacturing details but whatever I hear from youngsters and I interact a lot with youngsters is that there is considerable confidence amongst youngsters. You see electric vehicles coming out, so many companies have started producing electric cars, even high quality cars like Mercedes and others have provided electric vehicles in India. Then you have the electric scooters, electric other vehicles, there is considerable focus on automonising, bringing autonomy to vehicles and manufacturing productivity is improving and a lot of youngsters feel a lot more comfortable with the manufacturing today than they were 20 years ago. So I think there is a certain confidence and a certain positivism in the air. There is a certain kangaroo spirit in the air amongst youngsters. So that is what I could say because I am not an expert in that area.

Since we are talking about the next big trend etc. do you think this energy transition could be the next big trend and have you tried Chat GPT by any chance? That has been making the waves.
Of course, of course. Well my son introduced me to Chat GPT several months ago and it is a very powerful tool in adding knowledge to people and I think it will become very, very useful. This whole talk about banning Chat GPT in university is not a good idea because the test would be how smart are our youngsters in using Chat GPT to produce very compelling arguments, very compelling articles, very compelling answers. Therefore we will move to the next orbit where Chat GPT becomes a part of the students life but then the teachers will have to modify their stance to differentiate between answer A and answer B in that orbit. Today we are in a lower orbit. So I am a great believer in these technologies and I think you should embrace it wholeheartedly and India will be a beneficiary.

I also wanted to draw your attention towards what is happening in the capital markets at the moment. Do you see any of these new big tech companies, the likes of Zomato, Nykaa Paytm etc. being the next TCS or Infosys?
Well I am first an Indian citizen and then a tech entrepreneur so therefore I would want India to make tremendous progress, not just in IT but in every sector. Now the companies that you spoke about, they are all promising start-ups. I want them to succeed. I want them to become bigger than Infosys and perhaps TCS and that will be good for the country because as long as they can create productive jobs for youngsters, as long as they can create jobs which have higher disposable income for youngsters, I think it is good for the country. Therefore, I wish these companies my best I want them to become much bigger than Infosys. That is the only way the country can grow.

I was reading one of your earlier speeches and there was a very interesting quote that really caught my attention regarding IPOs and it was how entrepreneurship is all about deferred gratification. Now with what is happening in the capital market, do you think the entrepreneurs these days are looking at IPOs as surrogates to funding and forms of instant gratification versus the deferred gratification that they should really look for?
Well I would not blame the young entrepreneurs. I would blame the older people because it is the job of the older people, it is the job of the veterans, it is the job of seasoned venture capitalists to advise the youngsters that deferred gratification will result in much bigger wealth for those people. That is exactly what happened in Infosys. In the 80s there were at least a couple of my colleagues who were somewhat unhappy, in 90s rather, that we had not seen anything, any wealth out of Infosys. But then I advised them, I said look if you make sacrifice in the short and medium term you will reap the benefit many-many times more than otherwise. So I would not blame the youngsters, I would rather request the veterans in the field, venture capitalists to advise them on this. That is what I would say.

I also wanted to talk about how the last 10 years have been great for Indian start-ups. There was abundant liquidity, the policy action was positive but now the tide seems to be turning a tad bit with the funding winter setting in, liquidity becoming scarce etc. Do you see any kind of moderation in Indian start-ups and would you believe this would separate the wheat from the chaff per se?
As I said before this is all part of the business cycle. There was a time when we had boom time in venture capital availability. Now that has become much more difficult. This was expected. However, if our entrepreneurs focus on creating a differentiated business value proposition vis-à-vis their competitors and they are able to communicate well to the VCs, I don’t think money would become the problem. However, in these difficult times they have to realize two important things; one, they have to estimate the market very carefully.

Unfortunately there is no well established company in India which can estimate the market opportunity. That is a big problem in India, therefore entrepreneurs tend to do a not so quality estimation and that results in overestimation. They should avoid that overestimation. They should go with a realistic estimation and consequently their expenses should be curtailed and ideally they should focus on becoming positive in terms of cash flows as early as possible. I understand it takes time however, they should try. If we did all of that, I do not think there will be any problem.

The point that you were talking about at Infosys itself, how in the 90s there was this lack of gratification per se but then there were many of these offers made to you at that time when people were willing to buy you out for millions of dollars. At that time, how difficult was the decision for you and in your own decision making, what role does gut play versus logic?
No, I used to get a very good salary when I was heading the software group at PCS. So I did not do this for money. I took one-tenth the salary when Infosys was founded while I gave 20% more to all my younger co-founders. So money was never a part of our calculations and I am very, very grateful to my wife for that way of living our life. So I was not very much after en-cashing little money. I wanted to create a company that would be highly respected, that would be known throughout India, that would be known at least in the developed world as a company that has demonstrated good governance and all of that. So I could convince my younger colleagues that they should demonstrate their commitment to deferred gratification by not wanting to accept this offer and they were all very, very good people, very, very understanding youngsters and they all accepted. That is how we went forward.