The allocations are likely to span across the entire AI stack from infrastructure building GPUs (graphics processing units) and compute capacity to enterprise applications and sector-specific use cases across financial services, healthcare, manufacturing and agriculture, people in the know said.
Several global funds with India-dedicated vehicles, as well as leading domestic VCs, are expected to participate, including Khosla Ventures, General Catalyst, Lightspeed Venture Partners, Peak XV Partners, Accel India, Andreessen Horowitz and Prosus.
“Even if five to six VC firms commit to this amount, the dry powder targeted for AI startups would run up to over $1 billion…that is more than what startups raised last year. Deployment has now picked up and you will soon see startups that are only two or three years old come to the market for large growth cheques,” a Bengaluru-based investor said.
ETtechAccording to Tracxn data, AI startups in India raised around $643 million across 100 deals in 2025, a 4.1% increase from the year before—sharply diverging from the AI fuelled capital deployment seen in the US.
AI startups in the US last year raised $121 billion, mostly across late-stage deals with big chunks of monies being concentrated among frontier model companies such as OpenAI, Anthropic and xAI. This year, Anthropic closed a $30 billion capital raise that valued the Claude maker at $380 billion, more than double of its $183 billion valuation just five months ago.
Reuters reported in January that ChatGPT maker OpenAI could be valued at a whopping $830 billion as part of its conversations with SoftBank to raise an additional $30 billion from the Japanese investor.
“AI has moved from being a niche bet to a core allocation theme globally. LPs (limited partners) are watching what’s happened in the US…the speed at which valuations have scaled, the size of rounds, and naturally they want exposure to that curve,” the investor cited above said. “For India funds, there’s capital sitting, and some could now be nudging some of the VCs to tilt more meaningfully toward AI rather than treat it as a peripheral theme.”
In the largest funding round in India’s artificial intelligence space so far, AI cloud infrastructure startup Neysa said on Monday that it closed a $1.2 billion funding round, including $600 million debt led by private equity giant Blackstone. Neysa had earlier raised capital from risk capital investors such as Nexus Venture Partners, Z47 (formerly Matrix Partners India) and Blume Ventures.
So far, investors such as Accel, Peak XV Partners and Lightspeed have been backing startups working across the AI value chain.
Three-year-old Indian foundational model development startup Sarvam AI raised nearly $60 million from the likes of Peak XV Partners, Lightspeed and Venture Highway (now merged with General Catalyst). Fast-growing vibe coding startup Emergent received $100 million in investments from Lightspeed and Together Fund besides global firms such as SoftBank, Khosla Ventures and Prosus.
