Jio Brain: Another Reliance blockbuster in the making?

Mukesh Ambani, the Chairman of Reliance Industries, has a history of transforming industries with his big and bold bets on telecom technology, starting with CDMA-based mobile networks and then on fourth-generation LTE networks. After revolutionising India’s telecom sector with the Jio 4G and 5G bet, Ambani has doubled down on his big bet on artificial intelligence (AI), the hottest tech trend globally post-Covid.
 
This bet has been in the making since 2023. At last year’s annual general meeting of shareholders, Ambani had first announced, 'after broadband to everyone, we will deliver AI to everyone’. One year later, the company made a number of specific announcements claiming that AI is finally coming to everyone. These include:

-Data Centres: RIL to build new data centres in Jamnagar, powered by renewable energy, to make AI more accessible in India.

-Phone Call AI: A new feature that can record, transcribe, and translate phone calls, designed to save time and improve efficiency.

-Jio Brain: An AI toolkit aimed at creating data-driven workflows, providing real-time insights, and automating various operations within the Reliance Group.

-Jio AI-Cloud Welcome Offer: Jio users will receive 100GB of free cloud storage, which can be used for storing photos, videos, and documents.

Based on a recent report by Bernstein, Jio’s digital services are becoming an increasingly crucial driver of Reliance Industries’ overall growth. In FY24, Jio’s digital services generated an EBITDA of ₹615 billion. This figure is expected to rise substantially, with a projected EBITDA of ₹890 billion by FY26, reflecting a compound annual growth rate (CAGR) of 20%. 

Jio’s current valuation is pegged at ₹8,648 billion, positioning it as one of the most valuable segments within Reliance Industries, nearly on par with the company’s traditional retail operations. This valuation reflects not just the massive subscriber base that Jio has accumulated but also the increasing revenue generated per user. The report indicates that Jio’s ARPU (Average Revenue Per User) is expected to grow from ₹178 in FY23 to ₹231 by FY26, further boosting revenue and profitability.

Strategic importance

Jio’s role in Reliance’s portfolio is more than just financial. The digital services platform is at the heart of Mukesh Ambani’s strategy to integrate technology with traditional business models, creating a digital ecosystem that supports other segments like retail and new energy. This integration allows Reliance to leverage data, digital payments, and cloud services, with the latest AI announcements being an important part in this digital ecosystem. 

Jio Brain

Ambani outlined his vision for Jio’s future, with AI at the forefront. He announced the launch of Jio Brain, a comprehensive AI platform that will integrate AI across all Reliance businesses. This platform is set to transform not only Jio but also Reliance’s other operations in retail, energy, and manufacturing.
 
So, does the AI play promise a repeat of the Jio foray – in terms of size, scale and marketplace impact?
 
In 2016, Ambani disrupted the telecom industry by launching Jio, offering free calls and low-cost data, which made digital connectivity accessible to millions of Indians. This move not only brought a massive number of users online but also established Jio as a major player in the global telecom landscape. Today, Jio is the largest mobile data network in the world, with nearly 500 million users.
 
The core of the Jio AI strategy:
 
Ambani’s strategy involves constructing a robust AI infrastructure, similar to how he built Jio’s telecom network. Reliance plans to establish gigawatt-scale AI-ready data centres powered by green energy. These data centres will serve as the backbone for AI services across India, making AI affordable and accessible to all. This initiative mirrors the nationwide rollout of Jio’s 4G network, which connected even the most remote areas of India.
 
Ambani’s vision is to democratise AI, making it available to every Indian, much like how Jio made digital services affordable. Jio’s AI offerings will span various sectors, including healthcare, education, agriculture, and retail, with the goal of enhancing productivity and quality of life. The “AI Everywhere for Everyone” initiative aims to deliver AI services on low-cost devices. This could have an impact similar to what Jio had on the telecom ecosystem.
 
Challenges

While the parallels between Jio’s telecom success and Reliance’s AI ambitions are clear, the AI landscape presents unique challenges. Unlike the relatively standardised telecom industry, AI involves complex technologies and ethical considerations. Moreover, building AI infrastructure requires significant investment and expertise. Building robust AI infrastructure requires expensive high-performance computing resources like GPUs and cloud platforms.

Additionally, companies planning to develop their own AI will need Open and secure access to diverse datasets for training models. Reliance Industries has an advantage in terms of reliable and affordable internet access to facilitate data sharing and collaboration. Additionally, a public-private partnership will be key as a regulatory framework that addresses ethical concerns, data privacy, and security risks is necessary.