As funding becomes scarce for the Indian startup ecosystem in general, the explosion of Artificial Intelligence (AI) has given a new lease of life to entrepreneurs and founders in the country, as the Centre extends support to the sector.
Homegrown generative AI startup Sarvam AI recently raised $41 million in its Series A round, representing the largest raise at this stage for an Indian AI startup. The funding was led by Lightspeed with support from Peak XV Partners and Vinod Khosla-run Khosla Ventures.
Sarvam AI, founded by Vivek Raghavan and Pratyush Kumar, aims to develop a full-stack for Generative AI, including research-led innovations and an enterprise-grade platform for authoring and deployment. The company plans to train AI models that support the diverse set of Indian languages and voice-first interfaces, as well as co-build domain-specific AI models with Indian enterprises.
The Indian AI startup ecosystem is thriving, with more than 70 GenAI startups in the country having raised over $440 million to date. This surge in funding comes at a time when the government is also actively supporting AI startups. Minister of State for Information Technology and IT, Rajeev Chandrasekhar, announced that the government plans to fund and support AI startups. The government also aims to build foundational AI models and use cases for the emerging technology.
Globally, GenAI startups raised $10 billion in venture capital in 2023, a significant increase compared to 2021. The breakthrough nature of the technology and its widespread applicability have attracted record funding despite the challenges faced by the startup ecosystem in recent years.
Investors are recognizing the solid drivers and potential of GenAI startups, leading to higher valuations for companies focused on AI capabilities. Companies across sectors are ramping up their human capital by actively hiring talent in the AI field.
Prime Minister Narendra Modi has also shown support for AI innovation in India by announcing the AI Mission, which aims to establish the computing powers of AI within the country. This move aligns with the growing investments in AI and Machine Learning (ML) by Indian enterprises, with 63% proactively directing investments towards these technologies for business process automation.
In pursuit of their business optimization and transformation goals, 33% of Indian enterprises are strategically planning to adopt Generative AI. This reflects a forward-looking approach towards innovative technologies like AI as a driving force for growth.
Indian entrepreneurs and founders, such as Ola Founder and CEO Bhavish Aggarwal, are developing their own AI models tailored specifically to the Indian market. Aggarwal introduced ‘Krutrim,’ an India-first AI model capable of understanding 22 Indian languages and generating content in about 10 of them.
Furthermore, conversational AI startup CoRover.ai has partnered with Google Cloud to launch BharatGPT, an indigenous generative AI platform. The platform aims to leverage Google’s investment of $4 million for the development of AI capabilities.
As AI startups continue to attract funding and support from the government and investors alike, India is positioning itself as a hub for AI innovation. The country’s commitment to AI research, development, and deployment is expected to drive further growth and transformative change across various sectors.
In summary, AI startups in India are fueling innovation amid record funding and government initiatives. The funding landscape for startups in general may be challenging, but the AI sector is experiencing significant growth thanks to the support and investments pouring in. With a focus on developing India-specific AI models and technologies, entrepreneurs and founders are driving population-scale impact while embracing the transformative power of AI in various sectors.
