Business
Why AI is being trained in rural India
Priti GuptaTechnology Reporter, Mumbai
NextWealthVirudhunagar, a town in southeastern India, can boast temples that date back thousands of years.
But not far from those ancient sites, people are working on the latest tech – artificial intelligence.
One of those is Mohan Kumar.
“My role is in AI annotation. I collect data from various sources, label it, and train AI models so they can recognize and predict objects. Over time, the models become semi-supervised and can make decisions on their own,” he says.
India has long been a centre for outsourced IT support, with cities like Bangalore or Chennai being traditional hubs for such work.
But in recent years firms have been moving that work into much more remote areas, where costs for staff and space are lower.
The trend is know as cloud farming, and AI has given it another boost with numerous towns, like Virudhunagar, hosting firms working on AI.
So does Mr Kumar think he is missing out, by not being in a big city?
“Professionally, there is no real difference. Whether in small towns or metros, we work with the same global clients from the US and Europe, and the training and skills required are the same,” says Mr Kumar.
Mohan KumarMr Kumar works for Desicrew. Founded in 2005 it was a pioneer in cloud farming.
“We realised that instead of forcing people to migrate to cities in search of jobs, we could bring jobs to where people already live,” says Mannivannan J K, the chief executive of Desicrew .
“For too long, opportunities have been concentrated in cities, leaving rural youth behind. Our mission has always been to create world-class careers closer to home, while proving that quality work can be delivered from anywhere.”
Desicrew does all sorts of outsourced work including software testing for start-up firms, building datasets to train AI, and moderating content.
At the moment 30 to 40% of its work is AI related, “but very soon, it will grow to 75 to 100%,” says Mr J K.
Much of that work is transcription – turning audio to text.
“Machines understand text far better,” he explains.
“For AI to work naturally, machines must be trained to understand variations in how people speak. That’s why transcription is such a crucial step, it forms the foundation for machines to comprehend and respond across languages, dialects, and contexts.”
Doing such work in a smaller town is not a disadvantage, Mr J K says.
“People often assume rural means underdeveloped, but our centres mirror urban IT hubs in every way – secure data access, reliable connectivity, and uninterrupted power. The only difference is geography. “
Around 70% of his workforce are women: “For many, this is their first salaried job, and the impact on their families is transformative – from financial security to education for their children,” says Mr J K.
NextWealthFounded in 2008, NextWealth was also an early mover in cloud farming.
Headquartered in Bangalore, it employs 5,000 staff in 11 offices in smaller towns across India.
“Sixty percent of India’s graduates come from small towns, but most IT companies hire only from the metros. That leaves behind a huge untapped pool of smart, first-generation graduates,” says Mythily Ramesh, co-founder and managing director of NextWealth.
“Many of these students are first-generation graduates. Their parents are farmers, weavers, tailors, policemen – families who take loans to fund their education,” she says.
NextWealth started with outsourced work from the back offices of big companies, but five years ago moved into artificial intelligence.
“The world’s most advanced algorithms are being trained and validated in India’s small towns,” says Ms Ramesh.
Around 70% of its work comes from the US.
“Every AI model, from a ChatGPT-like system to facial recognition, needs vast amounts of human-labelled data. That is the backbone of cloud-farming jobs.”
She thinks there is plenty more work to come.
“In the next 3–5 years, AI and GenAI will create close to 100 million jobs in training, validation, and real-time handling. India’s small towns can be the backbone of this workforce.”
She is hopeful that India can remain a hub for such work.
“Countries like the Philippines may catch up, but India’s scale and early start in AI sourcing gives us a five to seven-year advantage. We must leverage it before the gap narrows,” she says.
KS Viswanathan is a technology advisor, and formerly worked at India’s National Association of Software and Service Companies, the trade association for outsourcing firms.
“Silicon Valley may be building the AI engines, but the day-to-day work that keeps those engines reliable increasingly comes from India’s cloud farming industry,” he says.
“We are truly at a tipping point. If cloud farming continues to scale, small-town India could well become the world’s largest hub for AI operations, just as it became the hub for IT services two decades ago.”
But success is not guaranteed.
While Next Wealth and Desicrew both say they have access to reliable and secure internet connections, Mr Viswanathan says that is not always the case in India’s smaller towns.
“Reliable high-speed internet and secure data centres are not always at par with metros, which makes data protection a constant concern.”
Even if good connections are in place, work needs to be done to reassure clients.
“The bigger challenge is the perception rather than a technical one. International clients often assume small towns cannot meet data security standards, even when the systems are robust. Trust has to be earned through delivery.”
Back at NextWealth, Dhanalakshmi Vijay “fine-tunes” AI. For example, if it confuses two similar looking items, like a blue denim jacket and a navy shirt, she will correct the model.
“These corrections are then fed back into the system, fine-tuning the model so that the next time it sees a similar case, it performs better. Over time, the AI model builds up experience, just like updating software with regular patches to make it more accurate and reliable,” says Ms Vijay.
Such work has an effect in the real world.
“It’s me and team who indirectly train the AI models to make your online shopping experience easy and hassle free,” she says.
Business
American Eagle stock jumps 10% as it expects a big holiday, raises forecast after Sydney Sweeney ads
An American Eagle advertisement featuring actress Sydney Sweeney on a billboard in Times Square in New York, US, on Thursday, Aug. 7, 2025.
Michael Nagle | Bloomberg | Getty Images
American Eagle issued bullish holiday guidance and raised its full-year forecast on Tuesday after posting better-than-expected quarterly results.
The apparel company is expecting fiscal fourth quarter comparable sales to grow between 8% and 9% – about four times better than the 2.1% analysts had anticipated, according to StreetAccount.
American Eagle is now expecting its full year adjusted operating income to be between $303 million and $308 million – up from its previous range of $255 million to $265 million.
American Eagle shares rose as much as 15% in extended trading.
The company beat third-quarter expectations on the top and bottom lines.
Here’s how American Eagle did during the quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
- Earnings per share: 53 cents vs. 44 cents expected
- Revenue: $1.36 billion vs. $1.32 billion expected
The company’s reported net income for the three-month period that ended Nov. 1 was $91.34 million, or 53 cents per share, compared with $80.02 million, or 41 cents per share, a year earlier.
Sales rose to $1.36 billion, up about 6% from $1.29 billion a year earlier.
The results are the first time investors are seeing a full quarter of impact from American Eagle’s splashy campaigns with Sydney Sweeney and Travis Kelce.
Companywide, American Eagle saw comparable sales grow 4%, better than the 2.7% analysts had expected, according to StreetAccount. While the business’s overall results topped expectations, they were primarily driven by Aerie, which saw comparable sales rise 11% and revenue jump about 13%.
At American Eagle, where the campaigns were focused, comparable sales grew just 1%, worse than the 2.1% analysts had expected, according to StreetAccount.
The company told CNBC the campaigns are “attracting more customers” and creating more attention around the brand, but the results show they have not yet been a major revenue driver.
However, they’re not having a major impact on profits, either. During the quarter, American Eagle’s operating margin was 8.3%, better than the 7.5% analysts had expected, according to StreetAccount.
Beyond its marketing campaigns, American Eagle told CNBC it saw record revenue in its third quarter and that “strong momentum” carried into the current quarter, where it saw a “record breaking Thanksgiving weekend.”
The rosy holiday commentary comes after peers like Abercrombie & Fitch, Gap and Urban Outfitters posted better than feared results ahead of the crucial holiday shopping season. Investors have been watching discretionary retailers closely to look for slides in consumer demand because of tariffs, but many have proven resilient so far. They’re showing that for now, higher prices aren’t stopping consumers from shopping, as long as they feel like they’re getting good value for their money.
Industrywide holiday outlooks from outside consulting firms have been relatively murky, but the latest slate of earnings from discretionary retailers have been a positive omen for holiday sales. Plus, turnout during the so-called Turkey 5 shopping weekend, the five day stretch between Thanksgiving and Cyber Monday, was stronger than expected, according to the National Retail Federation.
New Delhi: Credit card spending eased by Rs 2.5 billion in October to Rs 2,142 billion, a moderation of 1.1 per cent month‑on‑month but an increase of 6.1 per cent year‑on‑year, driven by a sharp shift toward point‑of‑sale transactions, a report said on Tuesday.
“The strong POS growth can likely be attributed to festive (Diwali) spending, whereas muted online spends are due to the elevated base of the previous month,” the report from Asit C. Mehta Investment Intermediates Limited said.
Point‑of‑sale transactions grew 22 per cent month‑on‑month and 11.4 per cent year‑on‑year, while online spending declined 12.7 per cent MoM and rose 2.7 per cent YoY. The top 10 banks accounted for 94 per cent of total spending, with HDFC Bank recording the highest MoM spending market share gain in October.
An increase of 6.7 per cent is seen in the total number of cards outstanding on a YoY basis, adding a total of 0.63 million cards, the report said. Transaction volumes saw a healthy growth of 4.6 per cent MoM and 19.2 per cent YoY. The YoY growth is lower than the historical average due to a high base last year.
Since volume growth outpaced spend growth, the average spend per transaction declined by 6 per cent MoM and 11 per cent YoY. With card issuance rising and overall spending remaining flat, the average spend per card declined 1.7 per cent MoM and 0.5 per cent YoY.
IndusInd Bank reported a steep 36 per cent MoM decline in average spend per card, due to a sharp fall of 34 per cent in its total spends. Among major banks, HDFC Bank led with 0.14 million new cards, followed by SBI (0.13mn), ICICI Bank (0.1mn), and Axis Bank (0.08mn). HDFC Bank reported the highest YoY gain of 1.12 per cent.
A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
A slew of new supply is still making its way through the multifamily housing market. That, coupled with weakening demand, especially from the youngest workers, is pushing vacancies up and rents down.
The national median rent for apartments fell 1% in November from October, and now stands at $1,367, according to Apartment List. It was the fourth consecutive month-over-month decline. Apartment rents are down 1.1% from November 2024 and have fallen 5.2% from their 2022 peak.
“Earlier this year, it appeared that annual growth was on track to flip positive for the first time since mid-2023; however, that rebound stalled out and reversed course during a particularly slow summer,” according to Apartment List researchers.
After hitting a record high for this index, which dates back to 2017, in October, the national multifamily vacancy rate remained at 7.2% in November.
The historic surge in multifamily construction over the past few years is now pulling back, but a good supply of new units is still coming online at a time of much weaker demand.
The fall historically sees the biggest slowdown in multifamily rents, but this year it’s even more pronounced. CoStar reported the biggest monthly drops in median rent it had seen in 15 years of tracking. The primary reason is that more young people are struggling to form new households.
“That 18- to 34-year-old group … I think it’s up to 32.5% of those now are living with family, and that’s the highest it’s been in a while,” said Grant Montgomery, CoStar’s national director of multifamily analytics. “I think it reflects high rental costs that have risen over the years, as well as the tougher job market for young folks just coming out of college.”
“That is where a lot of demand traditionally comes from, the core renter demand is from that sort of younger base,” he said.
The weakness is showing up in stocks of the major public apartment REITs. Names like AvalonBay, Equity Residential and Camden Property Trust are all down year to date.
Some markets are seeing rents drop faster than others, due to local economic factors. Las Vegas, for example, is experiencing slower tourism, which in turn hits jobs there. Boston has seen a decline in federal funding for biotech as well as a drop in foreign students for its colleges and universities; both are impacting its rental sector hard. Austin, Texas, is seeing the biggest hit to rents, thanks to still more construction of multifamily units.
While rents are softening nationally, and landlords are boosting concessions, renters are increasingly searching in more affordable markets.
Cincinnati was the market most searched for, followed by Atlanta and Kansas City, Missouri, according to a Yardi report that looked at where apartment hunters were active last summer, the traditionally busiest time for new leasing. St. Louis saw the biggest quarterly jump in tenant interest, and Washington, D.C., dropped from the top spot to No. 4.
“The Midwest, in particular, drew more attention than ever, signaling that many of its ‘hidden gem’ markets are no longer a secret,” according to the report, which found 11 of the top 30 cities for renter demand were in the Midwest.
Yardi also revised its expectations for 2026 supply, saying that while new supply will decline through 2027, a larger-than-expected under-construction pipeline caused it to increase its previous quarterly estimates for 2025 and 2026 by 6.8% and 2.5%, respectively.
As construction continues to slow into next year, the overall market should stabilize somewhat, according to the Apartment List report.
“That said, the supply boom still has a bit of runway remaining, and the demand outlook has begun to appear weaker amid a shaky labor market,” researchers wrote.
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