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Generative artificial intelligence (AI) has stunned companies and commoners alike with its abilities. But with public attention comes regulatory scrutiny. Experts say that India’s new data protection bill may be tough for platforms like ChatGPT and Google’s Bard.

This and more in today’s ETtech Morning Dispatch. ■ Eruditus logs first quarterly operating profit ■ Chip shortage hits smart driving licences, registration cards ■ Will 2023 be a lost year for IT? Generative AI platforms took the tech world by storm, but a major worry dogs the viral technology: use of public data. India’s draft Digital Personal Data Protection (DPDP) bill, earlier this month, , but for search engines and online directories as well.

Technology experts have said that generative AI platforms may not be allowed to scrape the internet for citizens’ personal data that’s in the public domain, as per the latest draft of the DPDP bill. If they do, they may face lawsuits in the country, such as the one . It must be noted that the bill has not been released yet, and experts are making these observations based on a leaked draft.

The latest draft has removed clause 8 (8), which listed any ‘processing of publicly available personal data’ under public interest as a criterion for deemed consent. “This removal indicates that AI chatbots shall collect and process publicly available personal information only after obtaining consent from data principals at the commencement of processing,” an expert said. The government has now introduced section 18, called legitimate purposes, where a concept similar to the erstwhile clause 8 (8) has been introduced, but it is restrictive.

: “The current bill does not allow for processing of publicly available personal data for the operation of search engines. . Till now, personal information that was not disclosed in the public domain was covered under clause 8 (8).

Now it is not, which means that I can decide that ChatGPT should not have my personal data,” another expert told ETtech. The 28% GST imposition on gaming apps could have a industry insiders told ET. If there is a slowdown in the gaming industry, it will also have an impact on the number of transactions processed by the fintech companies that work closely with these apps.

There could be an overall impact on transaction volumes, which would in turn affect the revenue of regtech and fintech companies who process payouts for gaming apps, and conduct KYC on their behalf. No impact has been seen as of now, but in the next two to three months the effect will be profound, industry insiders say. : Gaming apps use these companies for the following reasons: 1.

KYC: age check to abide by Google’s Play store norms, identity verification, and mapping of bank accounts. 2. Payouts: for customers who want to move their winnings to their bank accounts, gaming apps use payment gateway services to process transactions.

: If gaming revenues go for a toss, it will impact the toplines of fintechs and regtechs too. 1. Around 5% of the regtech industry’s volumes are estimated to be driven by gaming apps.

2. Fintechs could see a 25% erosion of transaction volumes in this sector. 3.

Industry estimates suggest that around 10 million transactions are done through these apps annually. 4. If ‘power users’ switch to the black market, and real-money volumes could go down as much as 80%, some say.

: Founders and senior executives of are making a beeline for New Delhi to meet top government officials this week, as they feel the 28% GST on online gaming will significantly shrink the size of the industry. The “sole agenda” in these meetings will be to make a “last ditch effort to delay or stop” the implementation of 28% GST, a gaming company founder told ET, adding that if the talks were not fruitful, his company and others will “have to look for other options”. As investors tighten their purse strings and the edtech sector witnesses a slowdown, Eruditus, a major player, is eyeing full-year profitability.

In line with this, the company in the April-June quarter, along with an over 60% jump in revenue on-year. : The company reported $400 million (around Rs 3,280 crore at the current exchange rate) in revenues for 2022-23 (July-June), compared to $245 million (around Rs 2,010 crore) the previous financial year. The Mumbai-based firm is targeting and ebitda of $40 million, before one-off items, for the full financial year of 2023-2024.

Eruditus founder and chief executive Ashwin Damera told ET that the journey to profitability happened primarily because the company had brought down its customer acquisition costs, and moved several of its roles from the US to India, thus bringing down employee costs. : Eruditus had seen its consolidated revenue in the 12 months to June 2022. To add perspective to these numbers, the company’s key competitor, Temasek-backed Upgrad, reported around $92 million in revenues for the year-ended March 2022, almost three times more than the previous year.

The semiconductor shortage witnessed in 2022 and the beginning of 2023 heavily impacted , much to the annoyance of new vehicle owners. Several automobile dealers also reported these delays. Disruption in the supply chain and the Russia-Ukraine war caused a shortage of chips, which meant that smart driving licenses could not be issued, Pethi Sarguru, CEO of Versatile Card Technology (VCT), one of the largest manufacturers of smart cards used for PAN cards and voter IDs, told ET.

Tenders for the manufacture of these cards are yet to be floated in multiple states, sources said. The chip shortage also affected the issuance of cards by banks late last year, but the situation improved after the intervention of the government and private agencies. Recent earnings of TCS, HCLTech, and Wipro suggest that the Indian software exports industry isn’t looking at any immediate demand revival.

The key sentiment appears to be uncertainty, at least for now. “There is near-term softness because of uncertainty. Some of the low return-on-investment and non-critical investments are being paused, deferred, or deprioritised,” said K Krithivasan, CEO and MD, Tata Consultancy Services.

Based on the results and demand commentary, visibility on recovery in the second half of the current fiscal is limited, brokerage house ICICI Securities said. During the June quarterly index call by market intelligence firm ISG, analysts said that almost 30% of the managed services spend consists of discretionary deals, which were missing during the first half of 2023. This has impacted revenue flow for the service providers.

With the Great Resignation of 2021-22 behind it, the industry was expected to return to the moderate recruitment of pre-pandemic days. Instead, hiring seems to have been paused as seen in the fourth quarter of last fiscal. Read a lowdown on as India tries to position itself as a chipmaking hub amid shaky global geopolitics.

The government will till July 28, as it is expected to make its arguments in the case related to the FCU on July 27 and 28 in the Bombay High Court, it was decided in the courtroom on Friday. ■ Why social media is hardly social any more ( ) ■ The Mac sure is starting to look like the iPhone ( ) ■ More than a quarter of UK adults have used generative AI, survey suggests ( ).