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Even as India increases its focus on artificial intelligence (AI), the country accounts for just 3 percent of early stage AI infrastructure & foundational start ups. AI application focused startups in India are on the rise, capturing a significant 65 percent market share, as per the ‘Sense AI Annual Ventures 2025’ report by AI investment fund Sense AI Ventures.
India has a large pool of software developers with AI knowledge. Instead of building infrastructure, they rely on global providers like Google, Microsoft, and AWS, which offer free cloud access to startups in their early years, said Rahul Agarwalla, founding partner, SenseAI Ventures.
AI tooling accounts for 22 percent of startups. The report is based on a sample size of 849 startups from across India, analyzed last year. Interestingly, Bengaluru emerged as the AI capital of India, securing over 40 percent of the total $1.35 billion funding AI startups received in 2024. Delhi NCR ranked second, followed by Mumbai in third place.
