Globally, AI could contribute $15.7 trillion to GDP by 2030 making it one of the largest investment opportunities in history. As AI adoption accelerates, demand is also rising for adjacent horizontals – Cloud data centres, cybersecurity, data sovereignty and semiconductors.
In India, this momentum is powered by a unique combination of structural strengths:
- A world-class AI talent pool accounting for 16% of global AI professionals, second only to the US
- A thriving start-up ecosystem—with over 2,000 AI startups launched in the last three years.
- Robust digital public infrastructure, including Aadhar, Unified Payments Interface (UPI) and Open Network for Digital Commerce (ONDC)
- The Government of India’s “IndiaAI Mission”, backed by a US $ 1.25 billion budget to foster AI development
- Regulatory support, including 100% FDI allowed in data centers, enabling rapid AI adoption
- Investors seeing AI move beyond enterprise tech into consumer facing solutions – content, gaming, health and vernacular experiences
AI is no longer a pilot project in India—it’s fundamentally reshaping how businesses compete, scale, and innovate.
Investment Momentum: PE & VC Activity in Indian AI
The investment landscape reflects this optimism. India’s AI startups (including pure play AI companies and startups with strong AI use cases) have raised US $1.2 billion in funding in 2024 alone. Notably, 2024 saw two of the largest AI funding rounds in India’s history. Krutrim, an AI startup specializing in large language models (LLM) for Indian languages, raised US $50 million led by Matrix Partners India, becoming the country’s first AI unicorn. Meanwhile, Sarvam AI, focused on full-stack generative AI and multilingual models, secured US $41 million in Series A funding led by Lightspeed and Peak XV Partners. These landmark deals underscore both the scale of capital now flowing into Indian AI and the growing confidence of global investors in the country’s homegrown AI innovation.
Where the Capital Is Flowing
India’s AI investments are concentrated in the high-impact sectors, each raising the bar for innovation and demand:
The Road Ahead: What’s Next for Investors?
Looking ahead, tech-focused funds—especially those backing SaaS and enterprise tech—are making AI a centrepiece of their investment thesis. With India’s AI use cases expanding and the ecosystem maturing, PE and VC funds are likely to further increase allocations to AI in 2025 and beyond. The AI era could potentially be an opportunity for India to reclaim its lost glory as the ‘Bird of Gold’.
At TH Global Capital, our dedicated Financial Services Group specializes in supporting investors and buyers focused on India’s rapidly evolving AI and technology sectors. Our team combines deep sector knowledge with strong relationships across leading private equity and venture capital funds, helping clients navigate the complexities of the Indian market and identify the most promising AI-driven opportunities. If you’re interested in learning more about emerging trends, deal activity, or tailored investment strategies in India’s AI landscape, we invite you to connect with us for a deeper conversation.
Sources:
Globally, AI could contribute $15.7 trillion to GDP by 2030 Source – Forbes
India’s AI startups (including pure play AI companies and startups with strong AI use cases) have raised US $1.2 billion in funding in 2024 alone – Source: Times of India
Krutrim, an AI startup specializing in large language models (LLM) for Indian languages, raised US $50 million led by Matrix Partners India, becoming the country’s first AI unicorn. Source- Pitchbook