Artificial intelligence (AI) is transforming industries in India and is emerging as a hotbed for venture capital investments. While many tech startups faced challenges over the last two years, AI-focused companies have thrived, defying the broader industry slowdown and reshaping investment trends.
AI leads investment trends:
The AI investment wave gained momentum in late 2022 following OpenAI’s ChatGPT, a highly innovative, first-of-its-kind generative AI chatbot that generates text, images, and videos. Such a creation attracted investors’ interest, as AI startups poured massive inflows of funding into the sector.
India has witnessed the emergence of AI as an expanding field, with substantial investment interest. As reported by the Times of India, entrepreneurs have started moving away from enterprise solutions and developing consumer products driven by AI, making fertile ground for innovation and growth.
Global and Indian AI Funding Highlights:
AI startups received significant funding globally in 2023. Between April and June, US-based AI startups attracted $27.1 billion in investments, accounting for nearly half of all startup funding. US startups raised $56 billion in 2023, a 57% year-over-year increase, the highest levels of funding in two years, according to PitchBook data.
In India, the rise of AI funding is equally striking. According to Venture Intelligence AI-focused startups and others based on AI, saw an emerging cash flow of $1.2 billion in 2023. Bhavish Aggarwal’s Krutrim AI valued at $1 billion and Peak XV Partners-backed Sarvam AI are leading this revolution, and it proves that India is equipped enough to be one of the global hubs of AI.
Major Players in AI Investments:
Lightspeed, the global venture capital giant, invested more than $2 billion in more than 100 AI startups in the past year. With AI positioned as a high-priority sector, this trend is expected to intensify in 2025, with investors showing sustained confidence in the technology’s transformative potential.
The Bright Future of AI in India:
Although AI remains in its infancy in terms of innovation in India, it has already emerged as a key driver of funding for startups. As entrepreneurs continue to harness AI for diverse applications, the technology will dominate the funding landscape in 2025, cementing its role as the cornerstone of the future tech ecosystem.
