Karnataka's AI-Driven Creative Economy: Focus on AVGC Sector

Karnataka is set to become a leader in the AI-driven creative economy by focusing on the AVGC sector, promoting responsible AI use, and fostering intellectual property creation.

Photograph: ANI on X

Key Points

Karnataka is positioning the AVGC sector at the forefront of its AI-driven creative economy, emphasizing intellectual property creation.
The state plans to establish a Responsible Use of AI framework to address concerns like employment disruption and ethical risks in AI-generated content.
Karnataka will offer grants up to Rs 50 lakh for original IP creation under the Elevate programme and develop creative clusters across the state.
A Creative Tech Skill Grid will be implemented to support reskilling and upskilling initiatives within the AVGC sector.
The state will introduce a regulatory sandbox mechanism to allow innovators to test emerging technologies before formal policy implementation.

Karnataka is positioning the AVGC sector at the centre of its AI-driven creative economy, with a focus on intellectual property creation, responsible AI adoption and large-scale skilling, state Minister Priyank Kharge said on Sunday.

Speaking at the valedictory ceremony of Bengaluru GAFX 2026, Kharge, who holds information technology and biotechnology portfolio, outlined a comprehensive roadmap to transition the state from a services-led ecosystem to one driven by original IP ownership and global storytelling leadership.

"The Animation, Visual Effects, Gaming and Comics (AVGC) sector today is not just about animation or gaming, it represents digital exports, cultural influence, youth employment and India's creative soft power in a rapidly evolving AI-driven world," he said, underscoring the sector's growing strategic and economic importance.

AI Transformation in Animation and Gaming

The minister said artificial intelligence was transforming animation and gaming workflows through faster concept creation, automated processes, dynamic environment generation and reduced production timelines.

He noted that AI tools could lower production costs by 25-40 per cent in certain animation processes, enabling smaller studios to compete globally.

Addressing Concerns and Building a Responsible AI Framework

Flagging concerns such as employment disruption, IP ambiguity in AI-generated content, skill mismatches and ethical risks, including deepfakes, Kharge announced that Karnataka would establish a Responsible Use of AI framework involving technologists, legal experts and industry stakeholders.

He said the state would strengthen its AVGC-AI mission, build structured IP guidelines covering datasets and royalty mechanisms, and expand grants of up to Rs 50 lakh for original IP creation under the Elevate programme.

Supporting Skills and Innovation

A Creative Tech Skill Grid will support reskilling and upskilling, while creative clusters will be developed across Karnataka under a hub-and-spoke model beyond Bengaluru, according to the minister.

He added that Karnataka will also introduce a regulatory sandbox mechanism to enable innovators to test emerging technologies before formal policy frameworks are put in place, reinforcing its first-mover advantage in the AVGC domain.

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