India’s sovereign AI sector has raised more than $5.5 billion across over 1,700 firms as of January 2026, according to a new report by Tracxn. The report — India and the Sovereign AI Shift — examines how the country is building its own artificial intelligence capabilities while staying connected to the global market.
As of 2026, India is home to more than 1,700 AI-native companies. Together, they have raised around $5.5 billion in equity funding. These companies work across enterprise software, consumer platforms, sector-specific tools and AI infrastructure.
AI investment in India reached a high of $1.1 billion in 2022. Funding slowed in 2023 and 2024 in line with a global venture capital slowdown. It recovered to $856 million in 2025 and has already touched $626 million in 2026 so far.
A key driver of this shift is the Rs 10,372 crore IndiaAI Mission. The programme has allocated GPU computing power to 12 companies building foundational and specialised AI models. This move lowers the cost of training large-scale AI systems within the country.
Public disclosures show that domestic AI models now range from 2.9 billion to 105 billion parameters. Some use mixture-of-experts designs to improve efficiency. For example, Sarvam AI has received 4,096 NVIDIA H100 GPUs along with about Rs 99 crore in compute subsidies.
Large infrastructure funding rounds are also emerging. Neysa AI raised $600 million at an enterprise valuation of around $1.4 billion, reflecting growing interest in AI cloud and GPU-backed infrastructure.
Globally, AI funding has crossed $473 billion. A large share is concentrated among a few major players. OpenAI, Anthropic and xAI together account for an estimated $170 billion, or about 36% of global capital.
In contrast, India’s funding is smaller in absolute terms but more widely spread across firms rather than focused on a handful of large labs.
India’s AI growth is supported by its large digital user base and public digital platforms such as Aadhaar, UPI, DigiLocker, ONDC and Bhashini. These systems handle identity, payments, commerce and language services at population scale.
Global technology companies are also increasing their presence. Partnerships such as Google–Adani’s $15 billion data centre plan and Amazon Web Services’s $8.4 billion infrastructure commitment reflect rising demand for local computing capacity.
According to Tracxn, India’s sovereign AI strategy is evolving steadily, with domestic training, expanding infrastructure and coordinated public–private support shaping the next phase of growth.
