Artificial intelligence is increasingly being trained in rural India, where companies are leveraging local talent for data annotation and transcription tasks, creating new job opportunities and economic growth in smaller towns. This shift, known as “cloud farming,” is transforming the landscape of IT outsourcing by bringing high-tech work to non-metro areas.
India has traditionally been a center for outsourced IT support in cities like Bangalore and Chennai, but firms are now expanding to remote areas where operational costs are lower. The demand for AI training has accelerated this trend, with companies such as Desicrew and NextWealth establishing hubs in towns across states like Tamil Nadu. These operations handle tasks ranging from software testing to building datasets for AI models, tapping into a vast pool of graduates from small towns who were previously overlooked by major IT employers.
Workers like Mohan Kumar, who lives in TN Palayam, Tamil Nadu, are engaged in AI annotation, collecting and labeling data from various sources to train AI systems. Kumar notes that there is no professional difference between working in a small town or a metro, as they collaborate with international clients from the US and Europe. Similarly, Dhanalakshmi Vijay at NextWealth fine-tunes AI models by correcting errors, such as distinguishing between similar items like a blue denim jacket and a navy shirt, which improves the AI’s accuracy over time through iterative feedback.
Key roles in this sector include data annotation, transcription, and content moderation. Transcription is particularly vital because it converts audio to text, enabling machines to comprehend diverse languages, dialects, and speech patterns. Desicrew’s CEO, Mannivannan J K, explains that this forms the foundation for AI to respond naturally across different contexts, and while 30-40% of their work is currently AI-related, they expect it to grow to 75-100% in the near future as demand surges.
The benefits are profound, especially for marginalized groups. Desicrew’s workforce is 70% women, many of whom are experiencing their first salaried jobs, leading to transformative impacts on their families’ financial stability and children’s education. NextWealth also reports that 60% of its staff are women, highlighting how these jobs empower local communities, provide global exposure, and help retain talent in rural areas by reducing the need for costly migration to cities.
Despite the advantages, challenges persist. Reliable high-speed internet and secure data centers are not always on par with metropolitan standards, raising concerns about data protection. KS Viswanathan, a former tech advisor, points out that the bigger issue is perception; international clients often assume small towns cannot meet data security requirements, even when systems are robust. Building trust through consistent delivery and demonstrating capability is essential to overcome these barriers.
Looking ahead, the potential is immense. Mythily Ramesh, co-founder of NextWealth, estimates that AI and generative AI could create close to 100 million jobs in India over the next 3-5 years in areas like training, validation, and real-time handling. She believes India’s scale and early start in AI sourcing give it a five to seven-year advantage over competitors like the Philippines, but this window must be leveraged quickly before the gap narrows.
This movement is not only creating careers but also fostering local economic development and innovation. As cloud farming scales, small-town India could become the world’s largest hub for AI operations, mirroring its success in IT services two decades ago. With continued investments in infrastructure, skills training, and efforts to change perceptions, these regions are poised to play a pivotal role in the global advancement of artificial intelligence, ensuring inclusive growth and sustainable progress.