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BENGALURU: India has over 60 generative AI startups, says a new report by industry body Nasscom. Generative AI startups in the country, it said, have already raised $590 million in funding, and most of it ($475 million) was from 2021 alone.
The Bengaluru region has 45% of the generative AI startups. The city’s deeptech startup ecosystem, high-end innovation-driven institutions, extensive industry presence and an emerging class of domestic angel investors are seen to be a big draw. The Mumbai-Pune region accounts for the second-largest pool, at 21%. This region boasts of some of the most well-established institutional investors & VCs, and a diverse talent pool.
The report said 74% of startups are generative AI native and 26% are those that have pivoted. About 37% of the non-commercialised solutions are expected to find markets within a year. Many Indian generative AI startups prefer a tech stack comprising public cloud and cloud-based databases, pre-trained models, and custom-built visualisation tools.
“Being a nascent technology, big-ticket investments, particularly in native Indian foundational models and enterprise-grade applications services, are yet to happen. In addition to limited investments, generative AI startups in India also face the challenge of limited high-quality and ready-to-use training datasets and lack of high-performance compute capacity at scale. Lack of clarity on data privacy, security, ethical guidelines, and globally consistent generative AI usage standards can further slow down growth,” Nasscom executives Sangeeta Gupta, SVP & chief strategy officer, and Achyuta Ghosh, research head, say in the report. They said companies will find it difficult to upskill a large workforce rapidly in 6-12 months.
Nasscom’s data shows that $8 billion was pumped into AI from 2013 to 2022 ($3.2 billion in 2022 alone) across 1,900 AI startups in India.



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