Indian businesses betting big on Small Language Models (SLMs): Deloitte report
Mumbai, 29 April 2025: According to Deloitte’s Tech Trends – India Perspective report, Indian businesses are increasingly adopting small, multimodal models to meet the demand for more efficient, faster and targeted solutions. The report also highlights that integrating SLMs, AI-based simulations and task-specific AI agents will drive the development of more personalised and context-aware solutions across industries.
The 2025 report discusses how AI is becoming the foundation of nearly every emerging technological trend. AI serves as the backbone, enabling and accelerating breakthroughs across industries. It is not just about AI in isolation; it is about how it drives a wave of innovation and fuels advancements in complementary technologies. In India, this integration and diffusion of AI are already taking root across the tech ecosystem, reshaping industries and paving the way for transformative change.
”Across Indian organisations, AI is not just a trend but a powerful force weaving together technological advancements and driving India’s growth as a global leader in innovation. However, India must enhance its infrastructure, particularly high-performance computing and sustainable energy solutions, to accelerate growth while empowering its workforce through skill development and building ethical AI frameworks. Another interesting trend we have observed is the growing role of context-aware intelligence in transforming how industries operate and interact. By combining multimodal AI, spatial computing and advanced analytics, systems are becoming adept at understanding environments, behaviours and intent, enabling hyper-personalised experiences, smarter resource planning and adaptive decision-making across sectors, from education and retail to urban planning and agriculture. Indian enterprises are moving beyond automation to deploy technologies that interpret, adapt and act in real time, making digital transformation more fluid, inclusive and future-ready,”
- Abhrajit Ray, Partner and CIO Program Leader, Deloitte India
Per the report, the rapid growth of GenAI has put hardware back at the centre of the technology conversation. What was once considered a settled, largely static and commoditised layer, with only incremental improvements over product cycles, is now being reimagined to meet the demands of advanced AI systems. From the Internet of Things to robotics, AI-powered hardware is transforming industries, enabling smarter devices and more efficient systems, creating new opportunities for innovation.
Specialised chips for critical applications, including power management, telecommunications and cryptographic acceleration, are becoming indispensable in this landscape. Additionally, integrating heterogeneous computing, where GPUs and NPUs are combined on a single chip, is unlocking new levels of efficiency and performance for diverse AI workloads. This shift marks a new era where hardware is not just supporting innovation but actively shaping it, driving a deeper integration between AI capabilities and the systems that power them.
Furthermore, the report emphasizes how spatial computing, driven by intelligent technologies, is enabling systems to shift from being merely reactive to truly proactive by anticipating needs and addressing challenges before they arise. It highlights the pivotal role of AI in advancing this transformation by enhancing the processing and analysis of data from a range of sensors, including cameras, LiDAR and motion detectors. In the defence sector, AI-powered mixed reality is enhancing preparedness through immersive simulations, while supporting faster, more strategic decision-making through autonomous systems. In healthcare, virtual environments are improving diagnostic accuracy and enhancing surgical training.
Deloitte’s report further states that AI is reshaping core modernisation across industries. AI-driven modernisation reshapes enterprise architecture, making core systems more adaptable to changing business demands. Traditional monolithic architectures are replaced with decoupled, composable structures, allowing organisations to integrate AI-powered insights seamlessly across various business functions. Companies are using AI to automate complex workflows, optimise resource allocation and enhance regulatory compliance, addressing challenges such as cost pressures, workforce evolution and increasingly demanding customer expectations. However, these innovations are challenging, requiring complex architectural changes to ensure scalability, security and long-term sustainability.
The report also highlights that the impending Year to Quantum (Y2Q) era presents an even greater risk: the potential breakdown of traditional encryption. This makes the adoption of quantum-safe encryption and stronger defences crucial to securing India’s digital future.
Focusing on AI’s role in the IT sector, the report states that AI is amplifying the capabilities of tech talent. It is being used for code generation, software testing and automation, which reduces manual effort and drives efficiency. This shift is encouraging businesses to move from traditional virtualisation models to more scalable, cost-effective, AI-driven solutions.
About Deloitte
This press release has been issued by Deloitte Touche Tohmatsu India LLP
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (DTTL), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Media contact
Spriha Jayati
Deloitte India
Email: sjayati@deloitte.com