Abstract

In recent years, the development of Artificial Intelligence as a Service (AIaaS) has marked a significant transformation in the way businesses integrate and utilize AI technologies. AIaaS offers scalable, on-demand AI solutions through cloud platforms. This paradigm shift has democratized access to AI, enabling even small and medium-sized enterprises (SMEs) to leverage powerful AI capabilities without the need for substantial in-house expertise or infrastructure. The primary advantage of AIaaS in India includes cost-effectiveness, scalability, and accelerated deployment of AI-driven applications. These benefits are particularly vital for SMEs and startups that lack the financial and technical resources to develop AI solutions from scratch. The reliance on AIaaS also introduces several drawbacks, including data privacy concerns, dependency on foreign tech giants, and the potential for market monopolization. In India, the regulatory framework governing AI and related technologies is still evolving. Existing laws such as the Information Technology Act, 2000, and regulations from the Securities and Exchange Board of India (SEBI) provide a foundation, but they may not be fully equipped to address the nuanced challenges posed by AIaaS. This research paper explores whether India's regulatory landscape is prepared to manage the risks associated with AIaaS and examines the potential for market manipulation through AI technologies. Comparing India's approach with that of developed nations, the paper will highlight lessons in regulatory practices, ethical standards, and technological governance. While AIaaS presents significant growth opportunities for the Indian market, it also necessitates comprehensive legal and ethical considerations to mitigate risks. The study suggests regulatory enhancements and ethical guidelines to ensure the technology's beneficial integration into India's socio-economic fabric.

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