Facing a Major Change: Vijay Shekhar Sharma’s Early Warning
Vijay Shekhar Sharma faced a looming challenge well before taking his mobile-services company public in 2010. As the head of One97 Communications, which would later evolve into Paytm, Sharma led a successful provider of mobile value-added services in India. These services comprised ringtones, ringback tones, cricket scores, astrology, jokes via SMS, and exam results delivered directly to feature phones nationwide.
Despite the apparent success, Sharma recognized a pressing threat to the business model. The rise of smartphones was on the horizon, and he anticipated a fundamental transformation in the industry that would disrupt existing revenue streams. At the India AI Impact Summit 2025, he reflected, “I was preparing for an IPO in 2010, but I worried about the future.”
He predicted the decline of the ringtone business as consumers would no longer pay for ringtones when they could stream music freely on smartphones. Sharma noted this shift was not merely replacing older communication methods like public call offices but signaling the end of an entire business ecosystem.
“The rise of smartphones was more than just replacing public call offices or STD booths—it was the end of those models entirely.”
Smartphones Open Up India’s Financial System
The smartphone revolution extended beyond communication, opening unprecedented access to financial services across India. Sharma observed, “The smartphone gave access to the financial system to every corner of the country.” This technological leap enabled Paytm to transition from a mobile content provider to a leading digital payments and financial services company.
Drawing on his experience, Sharma identified artificial intelligence (AI) as the current transformational force akin to the impact smartphones had earlier. Highlighting India’s pivotal moment, he stated, “2026 begins with a strong belief that AI will solve problems we did not think possible.”
He sees AI as foundational infrastructure that not only accelerates work but also broadens financial inclusion by enhancing credit access. Sharma explained, “I believe access to credit creates wealth. But granting credit means assessing risk for millions of small and complex cases.” AI’s ability to accurately assess these risks could significantly increase financial system participation throughout India.
Beyond Foundation Models: Building Practical AI Solutions
Sharma cautioned against concentrating exclusively on foundation models in AI—broad, general-purpose engines that underlie many AI applications. While acknowledging their importance, he stressed the necessity of creating applied AI systems tailored to specific industries and problems.
He illustrated this by comparing foundation models to engines and specialized applications to vehicles that deliver real-world value. “The world needs these vehicles much more than just the engines,” Sharma asserted. He underlined that applied AI systems are critical for addressing pressing global challenges in health, education, and more.
Supporting startups like Sarvam AI, which develops Indian large language models, Sharma emphasized that the greater challenge lies in crafting AI solutions that work effectively within distinct sectors. He concluded, “The fight is not just to build a foundation model. The fight is to build AI that works in specific areas and solves key problems.”
