As a result, homegrown generative AI startup Sarvam AI raised $41 million earlier this month, in its Series A round led by Lightspeed and supported by Peak XV Partners and Vinod Khosla-run Khosla Ventures, thus representing the largest raise at this stage for an Indian AI startup.

According to reports, India is home to more than 70 GenAI startups that have raised more than $440 million to date.

Founded by Vivek Raghavan and Pratyush Kumar, Sarvam AI plans to develop the “full-stack” for Generative AI ranging from research-led innovations in training custom AI models to an enterprise-grade platform for authoring and deployment.

Sarvam AI will train AI models to support the diverse set of Indian languages and voice-first interfaces. The company will also work with Indian enterprises to co-build domain-specific AI models on their data.

The AI startup aims to create population-scale impact layering GenAI on top of the highly successful India stack specifically for public-good applications.

“India has demonstrated that it can harness technology differently, and with GenAI we have an opportunity to re-imagine how this technology can add value to people’s lives,” said Raghavan.

“The race towards ever more powerful AI is both an exciting and divisive one. We named our company Sarvam, which in Sanskrit means ‘all’, as we are intentionally invested in technical and ecosystem innovations that make this technology accessible to all,” Kumar added.

Last week, Minister of State for Information Technology and IT, Rajeev Chandrasekhar, said that the government plans to fund and support AI startups in the country.

The government will also deploy ‘financial resources’ to build foundational AI models, large language models (LLMs), and various use cases for the emerging technology.

Globally, GenAI startups raised $10 billion in venture capital in 2023, a huge 110 per cent rise compared to 2021.

The slowdown in startup funding over the last couple of years, dubbed ‘startup winter’, was driven by rising interest rates, recessionary risks and an overall tough macro environment.

“Despite these challenges, GenAI startups raising record sums underscores the breakthrough nature of the technology, its widespread applicability, and its power to transform entire sectors and industries,” said Adarsh Jain, CFA, Director of Financial Markets team at GlobalData.

GenAI startups are expected to continue to attract investment in 2024 and beyond because the technology is underpinned by solid drivers.

“For instance, apart from accelerating startup funding, patenting activity in GenAI registered 85 per cent CAGR over the last five years, as per GlobalData’s patent analytics,” said Jain.

Companies across sectors are ramping up human capital by aggressively hiring talent around GenAI. Investors are also responding with higher valuations for companies focused on GenAI capabilities.

Earlier this month, Prime Minister Narendra Modi announced the AI Mission, saying the aim is to establish the computing powers of AI within India. The government is now aiming to develop computational capacity for AI startups in the country.

About 63 per cent of Indian enterprises are proactively directing investments towards AI and Machine Learning (ML) for the automation of their business processes in the forthcoming 12 months, witnessing 85 per cent growth in AI investments since last year.

According to the global software company Automation Anywhere, 33 per cent of these enterprises are strategically planning to adopt Generative AI as a driving force for growth, reflecting a forward-looking approach towards innovative technologies in pursuit of business optimisation and transformation.

“Productivity is foundational to economic growth and the world’s next level of evolution. Intelligent automation, including AI and generative AI, are proving crucial to solving the massive productivity crisis unfolding in front of us,” said Ankur Kothari, Co-Founder and Chief Operating Officer, Automation Anywhere.

Ola Founder and CEO Bhavish Aggarwal has revealed ‘Krutrim,’ described as ‘India’s own AI’ model.

Krutrim, ‘artificial’ in Sanskrit, will come in two sizes: A base model named Krutrim trained on 2 trillion tokens and unique datasets, and a larger, more complex model called Krutrim Pro.

“India-first AI should be able to understand the uniqueness and the right cultural context. It needs to be trained on unique data sets specific to us. It needs to be accessible to India, with India-first cost structures,” says Aggarwal.

'Krutrim' can understand 22 Indian languages and generate content in about 10, including Marathi, Hindi, Bengali, Tamil, Kannada, Telugu, Odia, Gujarati and Malayalam.

CoRover.ai has partnered with Google Cloud to launch BharatGPT, an indigenous generative AI platform. According to reports, Google may invest $4 million in the conversational AI startup CoRover.ai.

"Our intent with BharatGPT is about crafting a platform that encapsulates India's rich cultural heritage and flourishes in a cloud-first world. BharatGPT, which is built on Google Cloud's fortified infrastructure, confidently addresses these challenges, carving a niche as a trusted AI mainstay that is grounded and reliable," according to Ankush Sabharwal, CEO of CoRover.ai.