India’s AI Gold Rush: Startup Funding Soars 50% as Investors Bet Big on Targeted Applications

India's AI startup funding has surged by 50% in 2025, reaching $665 million, indicating a robust investor interest in deeptech, generative AI, and scalable applications

The AI sector in India is transitioning from niche interest to a booming industry, fueled by cheaper technology and ambitious entrepreneurs developing globally scalable applications

In the first seven months of 2025 alone, Indian AI startups secured 109 deals, marking a 46% increase from the previous year, with average deal sizes also growing significantly

The focus is shifting from large language models to building practical applications on them, leveraging India's improved infrastructure and expertise in creating scalable solutions

Notable AI ventures backed by investors include Goodscore, Dashverse, Carpl, and Kombai, highlighting the diverse application of AI in sectors like credit scoring, entertainment, and healthcare

Global and domestic venture firms such as Accel, Prosus, Stellaris, and Vertex Ventures are actively seeking AI investment opportunities, drawn by advancements in AI infrastructure and reduced costs

Deeptech is leading the investment charge with $349 million across 40 deals, followed by investments in generative AI and computer vision, indicating a strong market interest in these technologies

Some Indian AI founders are relocating to the US for better access to customers and talent, raising concerns about potential impacts on domestic AI innovation

Despite the talent outflow, industry leaders are optimistic about India's AI future, driven by the democratization of AI and its growing application across enterprises

If current trends persist, 2025 might be a landmark year for India in establishing itself as a global AI powerhouse, supported by a strong talent base and an encouraging investment climate