BENGALURU: With Artificial Intelligence (AI) gaining significant traction across various industries, investments in these start-ups are also increasing. According to data sourced from market intelligence firm Tracxn, the Indian AI sector includes 7,114 start-ups that have collectively raised $23 billion in equity funding so far.
Recently, Sarvam AI became the first company to receive government support to build an indigenous Artificial Intelligence LLM (large language model). Sarvam, an artificial intelligence company, has demonstrated proven capability in developing foundational models proficient in Indian languages.
Backed by top investors including Lightspeed, Peak XV, and Khosla Ventures, it has so far raised equity funding of $53.6 million.
Vivek Raghavan, Co-founder of Sarvam, said that they are ready to build AI that reaches every corner of the country. "Our goal is to build multi-modal, multi-scale foundation models from scratch. When we do, a universe of applications unfolds. For citizens, this means interacting with AI that feels familiar, not foreign. For enterprises, this means unlocking intelligence without sending their data beyond borders," he said.
Somdutta Singh, Serial Entrepreneur, Founder and CEO, Assiduus Global pointed out that start-ups in the AI space are increasingly moving from generic AI wrappers to domain-specific tools that solve real business problems.
Also, there are 4,379 Indian start-ups in the deeptech space, with a total equity funding of $9.47 billion. Recently, IIT Madras said that it incubated over 100 deep tech start-ups in FY25.
In 2024, Indian AI start-ups raised $780.5 million in total funding, a 39.9% increase from the previous year, signaling healthy investor interest despite macroeconomic slowdowns. "While the global AI wave is accelerating, India’s approach stands out for its practical orientation. Many founders are building for constraints like low compute, multilingual users, and affordability, which makes their innovation more inclusive and export-ready," she added.
She also said that investors are now more focused on AI start-ups solving specific problems in enterprise automation, fintech, and supply chains, rather than those building general-purpose or hype-driven products. This cautious optimism is creating a more grounded and sustainable AI investment landscape.
The Union Budget 2025–26 allocated Rs 2,000 crore to the IndiaAI Mission to strengthen domestic compute infrastructure, build indigenous LLMs, and set up AI data centers, tackling a core barrier for early-stage AI teams.