AI Adoption in Indian Startups: Challenges and Opportunities

Indian AI Startups Have a 'Fancy Ice Cream' Problem. Who's to Blame

Indian AI startups risk falling behind in a race increasingly defined by infrastructure, IP ownership, and sovereign capabilities. In stark contrast to the global trend of surging AI funding, the Indian AI startup ecosystem is facing a significant downturn, raising concerns among investors, industry leaders, and the government. A recent Tracxn report, shared exclusively with AIM, reveals that total funding for AI startups plunged by 53% year-on-year. It decreased from $305.9 million in FY 2023-24 to $143.6 million in FY 2024-25, alongside a 44% drop in the number of funding rounds. Meanwhile, data from analytics firm Dealroom shows that global AI startups secured $110 billion in 2024, a 62% increase from the previous year, with US-based startups accounting for around 42% ($46.2 billion) of the total funding. Not to forget, OpenAI recently announced that it has raised $40 billion at a $300 billion post-money valuation. "The initial AI funding boom was driven by hype, with many startups claiming AI capabilities without substantial technological depth and real AI/ML implementation," Surabhi Sanyukta, VP of Investments, BlackSoil, told AIM in an exclusive email interaction. We at AIM wrote last year that India was likely the new hub for GenAI startups. It fueled high hopes that these startups would create revolutionary products and models to put India on the global map. But fast-forward to today, and the landscape looks surprisingly similar -- no game-changing innovations have surfaced. This lack of innovation debate was further amplified by a recent WhatsApp forward that compared the startup ecosystems of India and China. Commerce Minister Piyush Goyal cited this to make a scathing attack on startups for their lack of production innovation in India. The Minister took a dig at some of the thriving startups and criticised them for their overemphasis on instant convenience services while lagging in deep tech and high-impact industries. He criticised them for turning unemployed youth into cheap labour instead of promoting significant technological progress. Goyal pointed out that while Chinese firms are leading advancements in semiconductors, robotics, electric vehicles, and battery technologies, many Indian startups focus on "fancy ice creams" and grocery delivery. This comment ignited a furore within the startup community even as he appealed for greater participation from the investor community. Investors felt that the startups offering solutions were often tailored for a narrow set of use cases, lacking scalability or genuine impact. This disillusionment, combined with broader market corrections and tighter capital flows, has led to more selective and measured funding, Sanyukta explained. She said India largely remains a consumer of AI rather than building a creator economy. For instance, the Ghibli image generation trend, which flooded the internet, is a classic case. Even today, amid the government's push for AI innovations, several startups focus on building applications on top of existing global models instead of developing foundational AI infrastructure. This limits their strategic value in a world where countries with decisive AI strategies are emerging as global leaders. Romit Mehta, an investor at Lightspeed India, dismissed Goyal's statements in a post on X and termed them as one of the most odious takes on the ecosystem in a while. He argued that blaming founders conveniently shifts the focus away from the government's failure to foster a meaningful ecosystem for manufacturing and deep tech in India. Worse, he added, it undermines the grit of those building for and in India, especially in deep tech. However, several founders of GenAI startups whom AIM spoke with disagreed with the minister's comment and explained how the ecosystem is making progress. Pranav Mistry, founder of TWO AI, told AIM that the company has expanded from building foundational models like SUTRA into a full-stack GenAI infrastructure provider -- tailored for enterprise-grade security, localisation, and scalability. "We also launched India's first reasoning model, SUTRA-R0, earlier this year. Our revenue has already crossed a $10M run rate this quarter, and we're on track to reach our $20M (170 crore INR) target by the end of 2025," he said. Amid the tightening of funds, Mistry was hopeful to raise another $50 million to scale infrastructure. This is in line with the strong demand from its growing enterprise customer base and to expand its tech and GTM teams, especially in India. That said, China's DeepSeek, which made waves in early January and brought down US chip stocks, is already gearing up for its next reasoning model, which is reportedly set to launch in the coming weeks. "The round will also support further R&D in LQMs, secure inference, and new agentic AI solutions, helping us deliver India-first AI globally," Mistry added. On the contrary, Harneet SN, founder of Rabbitt.ai, told AIM that application-based generative AI startups in India do not need to raise more funds to sustain themselves. He opines that AI is a very revenue-positive domain. The company is likely to hit a $10 million ARR. The company pivoted from improving AI models, data annotation, and deploying open-source LLMs for specific use cases to developing full-fledged GenAI applications rather than just selling a single AI product. Harneet explained that companies now demand comprehensive AI solutions rather than just customising or deploying models. On similar lines, Pratik Desai, founder of KissanAI, told AIM that since last year, their company has focused on building an agriculture knowledge platform with a multi-agent orchestration engine. "We are currently raising funds to scale globally and expand our team, as we are seeing strong global demand and significant organic inbound traction for our platform," Desai said. Besides, there are several AI startups in India exploring vertical SaaS. Nurix AI, the latest startup founded by Mukesh Bansal, secured $27.5 million in seed and Series A funding last September. The financing round was co-led by General Catalyst and Accel, with participation from Bansal's venture studio, Meraki Labs. It specialises in building custom AI agents for enterprises, focusing on solutions such as AI-driven customer service with human oversight for call centers and outbound sales. AIM also spoke to Madhav Krishna, founder of Vahan.ai, which is backed by Khola Ventures. He said that this year, his company will focus on voice agents for the hiring process, assisting with job discovery, matching, onboarding, and training. Krishna further explained that the already existing AI recruiter voice bot will be part of it. "There's been this buzz around vertical SaaS AI a lot in the US, and we are, in that sense, highly verticalised because we're utilising it for a very specific use case in India," he added. However, in a previous interaction with AIM, Debarghya (Deedy) Das of Menlo Ventures said that India faces a considerable challenge in competing with Western labs. Although not entirely impossible, he admits, as an investor, he is unlikely to make such a bet. "If you look at AI in India today, the market size doesn't quite justify the level of R&D investment needed to make it a success," he said. Das views localised AI models, particularly those supporting Indian languages and voice applications, as a natural and achievable focus area for India's AI ecosystem. Tracxn reports that customer service software, particularly in self-service and conversational AI, is the dominant business model among AI startups in India. Conversational AI platforms, including chatbots and virtual assistants, are playing a crucial role in this transformation by automating responses, handling queries, and improving overall customer interactions. The data matches reality, as the majority of Indian AI startups, including Corover.ai, Sarvam AI, Yellow AI, LimeChat, Kogo AI and Gnani.ai, are building voice-based chatbots for customer service in Indian languages. It would not be wrong to say that India loves AI voice agents. So far, only Sarvam AI and Krutrim claim to be building an LLM from scratch. At the same time, everyone has high hopes for the government's IndiaAI mission, which has called for proposals to build an indigenous LLM within the next eight to ten months. However, IIT Madras professor Balaraman Ravindran has cast doubt on its execution. Earlier this year, Ola chief Bhavish Aggarwal announced Krutrim AI Lab and launched several open-source AI models tailored to India's unique linguistic and cultural landscape. This includes the launch of Krutrim 2, the startup's second LLM, consisting of 8 billion parameters. He also said that the lab has committed an investment of ₹2,000 crore into Krutrim, with a pledge to increase this to ₹10,000 crore by next year. The company became one of India's first AI unicorns after raising $50 million in early 2024, led by Matrix Partners India, which valued it at $1 billion. Meanwhile, in 2023, Sarvam AI raised a total of $41 million in a round led by Lightspeed Venture Partners, with participation from Peak XV Partners and Khosla Ventures. The startup recently partnered with the Unique Identification Authority of India (UIDAI) to improve the user experience for Aadhaar services. It should be noted that foreign investors, not Indian ones, back Sarvam AI. However, there are several Indian VCs who have invested in Indian AI startups. Speaking of strategy of Indian VCs, Sanyukta said that investors are now prioritising startups with strong AI fundamentals, differentiated IP, and real-world applications that solve critical challenges, especially in sectors like healthcare, agriculture, and education. In India, Accel is supporting AI startups through its Accel Atoms 4.0 program. This program will offer up to $1 million in funding for startups focusing on AI and Bharat, specifically catering to middle-income households in Tier 2, 3, and rural India. Similarly, WTFund -- led by Zerodha co-founder Nikhil Kamath -- is back with its second cohort, featuring 22 founders across nine startups in its initiative for entrepreneurs under 25. The fund offers up to ₹20 lakh in grant funding, along with mentorship and strategic support to help early-stage startups scale their impact. Zepto founder Aadit Palicha took Goyal's criticism personally, stating that it is unfair to blame food delivery apps for the lack of deep-tech startups in India. He pointed out that nearly 1.5 lakh real people earn their livelihoods through Zepto today -- a company that did not exist 3.5 years ago. "₹1,000+ crores in tax contributions to the government per year, over a billion dollars of FDI brought into the country, and hundreds of crores invested in organising India's back-end supply chains, especially for fresh fruits and vegetables. If that isn't a miracle in Indian innovation, I honestly don't know what is," he said. Moreover, he blamed the lack of a foundational AI model in India on the country's failure to build great internet companies. "Most technology-led innovation over the past two decades has originated from consumer internet companies. Who scaled cloud computing? Amazon (originally a consumer internet company). Who are the big players in AI today? Facebook, Google, Alibaba, Tencent, etc. (all started as consumer internet companies)," he said. However, his argument falls short as OpenAI, Anthropic, Cohere, and DeepSeek did not start as internet companies. Shaadi.com founder Anupam Mittal also dismissed Goyal's statement, saying that in the last few months, he has met a few deep-tech companies that have absolutely blown him away. He noted that from AI and space tech to material science, Indian entrepreneurs are ready to take on the world. "But capital and the ecosystem for growth and commercialisation are severely lacking. Founders can do most things but not everything," he added. On the other hand, Zoho founder Sridhar Vembu took Goyal's statement positively. In a post on X, he said that the government cannot invent a better operating system or a smarter robot. "The government should not even fund such things -- it is not usually good at picking winners and losers. At best, it can conduct competitions where companies participate and then purchase the best Indian products," he added. He said that he sees Goyal's call as a challenge to our engineers and technologists, not as pointing fingers."What we need are smart engineers who roll up their sleeves and get it done." He explained, using an analogy, that Indian deep tech startups should ship vitamins and painkillers to fund their business, even as they work on a cancer cure. "How we pay for our big tech ambition is very much part of the engineering problem that smart engineers must solve. We can do this.

SaaS-ination? AI may be threatening traditional SaaS model

When more than 1,000 softwareas-a-service (SaaS) entrepreneurs gathered in Chennai earlier this week for the annual SaaSBoomi conference, one topic dominated the discussions -- the impact of artificial intelligence (AI) on the industry. It was inevitable. In the past two years, AI has been disrupting almost all industries, including SaaS. So much so that Microsoft CEO Satya Nadella, in a podcast hosted by BG2 in December last year, said that SaaS applications will collapse in the agentic era. Most founders at the conference agreed that SaaS applications were under threat, but they saw new windows of opportunity. Girish Mathrubootham, cofounder and executive chairman of Freshworks, said SaaS maybe dead in its current form, but enterprise software is not. Companies need to adopt and evolve with the changing tides, he said at the three-day event. Case in point, SaaSBoomi has launched BoomiAI, to reflect the larger industry trend and support founders building AI native startups. In fact, according to Mathrubootham, the shift caused by AI could create a $1-trillion opportunity for the industry. This includes the existing enterprise software market that stands at $300 billion plus the salary time -- or opportunities where AI agents and solutions can be used instead of people resources to save cost for customers. This will help make it a $1-trillion industry, he said. Even 2% of this is a huge market opportunity for Indian players, Mathrubootham said, adding that whoever wants can go and get it now. To tap into this opportunity, it is not just enough to create an AI product, but one also needs to reimagine and bring in a cultural shift that can enable the companies to do that, according to SaaS founders. But are the Indian SaaS players ready to do that? It remains easier said than done. The next Nokia At least three SaaS founders, who are currently building AI-first products and adding AI features in their current products, said they are paranoid. "I think you need to be paranoid because there is so much happening in the market," said Siva Rajamani, founder of Everstage. He likens this to the iPhone launch in the 2000s. In 2008, Nokia -- the then market leader -- had spoken about how the iPhone will disrupt the mobile phone market. Back then, Nokia had a closer prediction of how iPhone sales would be the next year than even Apple itself. "But they still could not act," Rajamani said. "I see a similar thing happening to a lot of Indian companies as well. We all know AI is coming. But if we don't act, we could be the next Nokia," he said. This is driving a lot of founders to accelerate their AI adoption and reimagine products and services for their clients. What is changing? Freshworks's Mathrubootham, who stepped down as the CEO last year, is driving the company's AI strategy. The company launched AI agent Freddy, which can do self-service automation for customers. They also have Freddy co-pilot for human users. SuperOps offers professional services automation and remote monitoring management for managed service providers (MSP) and IT teams. One of the things the company does is use AI to streamline their processes and drive efficiency. The company is also building solutions that can help its customers cut down on labour costs. For instance, for the smaller clients in the MSP space, people can be replaced with agentic AI for invoicing, billing and ticket dispatches. "The most important thing is that we want to be close to customers and see how that industry is disrupted and evolving," said Arvind Parthiban, founder of SuperOps. Everstage, which offers software for managing sales commissions, said its AI-first product is currently under development. The company is also looking to improve the existing products using AI and is constantly in touch with customers to understand their challenges. Changing business models From per user-based pricing, companies are beginning to experiment with different business models. The most popular ones are based on either consumption or outcome. "Freshworks has both the models (per user and consumption-based) for four years. The only thing is, the shift is happening more on the consumption-based model," Mathrubootham said at the sidelines of the SaaSBoomi event. "As automation keeps getting better, we'll get more money from automation like co-pilot or AI bots." Some companies are also exploring a separate costing structure for AI services. Parthiban said while SuperOps is looking at this, first it is allowing its customers to use it for free or offer restrictive access to show them the value of additional features. "Then I will come up with an add-on pricing, which can be charged separately," he said. However, with customers reluctant, not all of them are seeing changes in their business models. Khadim Batti, co-founder of WhatFix, said the business models have not changed at this point. "As agents and buyers also evolve, we might make it more outcome based," he said. Even as companies are evolving with customers, they are trying to bring in a cultural shift. Cultural shift Aneesh Reddy, co-founder of Capillary Technologies, said the biggest challenge with this wave is not technology, but a mindset shift of not just company but also employees. "The company's culture needs to change to make it AI first," he said. Capillary Technologies has set up a central team that works with each business function such as human resources, customer success and finance to modernise and drive efficiency using AI. For instance, the firm has a bot for all customer success and support teams. "Earlier if they needed something, they would ask our product teams. Now they have DocBot, which reads all our documentation on products and tells people what to do," Reddy explained. Everstage's Rajamani said the company is doing hackathons, where employees are encouraged to think AI-first, be it building anything within the platform or company and awarding the winners. In addition, every function in a company has an owner, who is taking an AI-first approach within their functions. "It's not just building a product on AI, but also as a salesperson, as a marketing person. What are all the things that we could adopt from AI to become better?" he added. This also means that companies are looking to work with or acquire those that align with them. Making allies All said and done, it is not always easy for large players to reimagine what nimble startups have been able to do. It is for a reason that Cursor, where you can create a code using a prompt instead of text boxes and check lists, is an instant success. Large companies are looking at forging partnerships, or acquisitions, or both. For instance, contract management firm Icertis has partnerships with startups such as Harvey. The company is also looking to acquire companies that have strong domain expertise in the areas of procurement, sales and generative AI. Parthiban of SuperOps said that the firm is currently working on a marketplace model. "SuperOps is looking to incentivise new age players to build on top of our platform, where they can access our customer base and sell their products and services," he said. The company is also open to acquisitions, if they are building critical technologies. "We either have to compete with them or make them," Parthiban said.

How 9AI Is Automating Workflows For Indian Enterprises

9AI is backed by iStart Rajasthan, a flagship initiative of the state government that supports innovative startups What's next after OpenAI and DeepSeek? Now that these tech startups have hit the innovation sweet spot, the ChatGPT parent is reportedly eyeing a funding round that could value it at $340 Bn, more than 2x its current valuation of $157 Bn, while the Chinese disruptor is mulling outside funding for the first time. Presumably, they will continue raising huge sums to grow fast and innovate. However, not all AI-driven innovation stories require such massive investments. A new breed of automation startups is now working on AI tools and models to help enterprises ditch time-consuming and effort-intensive manual processes. Among these is a growing cohort who has moved beyond typical big data analytics and traditional AI-ML systems, focussing instead on GenAI to offer tailored solutions and personalised experiences based on enhanced decision-making. The reason? AI has already gained momentum in four key sectors - BFSI, CPG and retail, healthcare, and industrials & automotive - and their AI adoption will likely account for 60% of India's potential GVA worth $500 Bn. In fact, the evolution of India's techade is firmly linked to world-leading AI adoption across industries, especially those struggling to extract insights from large datasets, handle cumbersome documentation and automate repetitive tasks. Given the rising requirement for enterprise AI solutions to spur commercial success, Udaipur-based 9AI is developing a wide range of analytics and automation tools. "Many companies use off-the-shelf automation tools, as few innovators have genuinely unlocked the capabilities of advanced, generative AI to drive transformational change. This, in turn, stifles growth, raises costs and prevents businesses from reaching their full potential," said Garvit Chouhan, who teamed up with college mates Aaditya Saini and Kaustub Pandey to set up the bootstrapped venture. The startup is rooted in a shared belief that businesses should be able to operate more efficiently and with greater insight by leveraging AI to drive decision-making and innovation. Rather than creating point solutions for specific tasks, the founders designed and developed an AI platform capable of automating entire processes. Furthermore, these AI solutions can be built into industry-specific workflows with minimal disruption. 9AI combines its deeptech R&D with AI and agile operational practices on its SaaS platform to automate complex workflows, improve decision-making accuracy and reduce processing times and human errors, driving down costs all the time. It has three distinct revenue models to cater to businesses of all sizes. The first is an outsourcing model, including a one-time development fee with annual maintenance. The second is an agency model involving a monthly development fee and yearly maintenance. Finally, there is a partnership model, where the monthly development fee is significantly lower in exchange for product equity or revenue sharing. Chouhan says the partnership model contributes 40% of the startup's revenue. "For AI to succeed truly, it has to be tailored to the needs of each business. That's why we offer these flexible revenue models. We want to partner with our clients to help them scale rather than deliver a one-size-fits-all solution." Backed by iStart Rajasthan, a flagship initiative of the state government for supporting innovative startups, 9AI clocked INR 5 Cr in revenue in FY24 and expects a 4-6x jump in the current financial year. From Hackathons To Real-World Impact: How 9AI Is Transforming Industries The founders met during their undergraduate days at the College of Technology and Engineering (CTAE), Udaipur, and bonded over their passion for technology and deep interest in solving operational challenges. They participated in CTAE hackathons and worked on a series of side projects such as developing a CRM SaaS platform to manage ecommerce after-sales services. Chouhan later joined IIT-Madras to specialise in data science and programming and participated in an entrepreneurship programme at Y Combinator. The trio's initial foray into technology development to resolve real-time business challenges paved the path for a broader platform, and 9AI was launched with Chouhan at the helm. "Our technical USP lies in our comprehensive integration of large language models [LLMs] and advanced data pipelines that 'understand' complex documents and zero in on the action required. Our operational USP is our ability to rapidly integrate newly developed AI solutions into existing enterprise processes and deploy them as soon as possible," the CEO said. Here is a quick look at 9AI tools and use cases across industries and pilot projects. Enterprise solutions at scale: 9AI develops business automation tools tailored to address specific challenges for various industries, from insurance and finance to education, retail and more. To begin with, it has automated claims processing for a public sector insurer using AI-driven triage, including document analysis, claim assessment and categorisation based on criticality and complexity. The outcome: Processing takes 70% less time, and there is greater accuracy overall, optimising the claims handling workflow and enhancing the customer experience. In mortgage finance, it has automated document verification and loan processing, slashing processing time by 60% and minimising errors. It has also developed a cutting-edge assessment tool to evaluate hundreds of subjective test responses at a fraction of the time and cost consumed by dozens of human evaluators. Additionally, 9AI has built intelligent search and personalised recommendation engines that boost engagement and drive conversions by delivering relevant content to the right audience. AI agents for multi-channel services: As Nvidia CEO Jensen Huang pointed out at CES 2025, the world is entering the age of agentic AI, and the shift is worth a multi-trillion-dollar opportunity. Unlike GenAI, which creates content and tools, AI agents carry out a variety of tasks and manage routine processes across industries while making decisions based on real-time data. (Think of a customer-facing chatbot on a retail or a banking site: We know their critical importance.) In sync with the latest industry trend, 9AI makes custom-built AI agents for advanced automation and intelligent decision-making. These AI agents can be integrated with multiple communication channels, including email, call, WhatsApp and website/app, ensuring consistent and intelligent interactions with minimum human interventions. Here, the retail sector benefits most. For instance, a CRM-lead generation bot enables up to a 30% rise in conversion. Fitted with existing systems, it can enhance sales workflows, driving efficiency and revenue. LLM fine-tuning: The startup incorporates business-specific data and optimises existing language models to deliver contextually relevant outputs, helping businesses derive insights from vast datasets. Visual data analysis and document processing: 9AI provides various image processing solutions such as object detection, similarity analysis and segmentation. Additionally, it can generate images based on user-defined inputs. It also offers automated document parsing, precise data extraction and intelligent classification to improve workflows and enhance operational efficiency. Data solutions & ML training: The startup creates robust data pipelines to ensure reliable data analysis and provides comprehensive training modules for machine learning. This means 9AI has in place an end-to-end data integration ecosystem that covers everything from data ingestion, porting, processing, and model training to deployment and monitoring. It helps businesses optimise their AI workflows while data is managed seamlessly and models perform at their best, all while providing the flexibility to scale as requirements evolve. Open-source integration: 9AI also deploys and integrates open-source AI models such as DeepSeek, Qwen, Llama and others, offering businesses a dynamic blend of flexibility and cost-efficiency. iStart Rajasthan Provided The Right Ecosystem To Drive 9AI's Growth In the fast-evolving world of AI, early support can make all the difference between an idea that fades and one that scales. For 9AI, a rising player in this space, that critical backing came from iStart Rajasthan, the state government's flagship initiative. It is no run-of-the-mill incubator, providing instead essential infrastructure, expert mentorship and valuable market access to sharpen the startup's vision and accelerate its growth. At its state-of-the-art Udaipur facility, iStart offered a collaborative and dynamic work environment equipped with modern labs, high-speed internet and essential office resources, giving the 9AI team all the vital tools to refine its tech offerings. But the real impact extended beyond infrastructure. Its deep network of industry veterans and domain experts allowed the startup to connect with mentors who helped shape its business model and go-to-market strategy. The initiative also played a key role in business development, enabling 9AI to validate its solutions in real-world settings as it worked with government agencies and private enterprises. As a result, the number of pilots grew, and the new players gained rapid traction in the competitive industry. "I would say iStart bridges the gaps between ideation, innovation, execution and commercialisation. Its early-stage support laid the groundwork for scalable development and quick deployment of AI solutions. The ecosystem has moulded our strategy, enhanced our product quality and given us the confidence to scale our solutions," said Chouhan. What's Next For 9AI Amid India's Artificial Intelligence Boom The AI and GenAI models and their applications will continue to grow as enterprise adoption has kicked in at scale. Globally, the intelligent process automation market (which covers all sorts of business and production-related automated systems) is estimated to reach $67.7 Bn by 2034 from $17.3 Bn in 2024, clocking a CAGR of 14.6%. India is set to mirror the global trend, given that 70% of GenAI startups are now catering to enterprises alone, and businesses of all sizes are keen to embrace the AI age motto - automation anywhere for greater efficiency, fewer costs and better earnings. The current market dynamics have opened a massive opportunity for tech enablers like 9AI and its peers. They can soon build an automation-led digital transformation ecosystem driven by AI-powered operations, insights and decision-making skills. Add to that the global resurgence of venture capital funding in the AI space - $100 Bn in 2024, more than 80% increase from $55.6 Bn in the previous year - and all seems hunky-dory for enterprise-first GenAI startups. In tune with the evolving scenario, 9AI will focus on breakthrough innovations in GenAI and deeptech to cater to diverse sectors and refine its existing solutions based on feedback. It will expand its core team and strengthen its strategic partnerships to validate new use cases and drive growth. It is also planning to set up a top-notch AI research facility. In the long term, 9AI eyes overseas expansion and global partnerships with technology firms and research institutions to develop advanced model architectures and contribute to the evolution of Artificial General Intelligence. (For context, AGI is still a hypothetical stage where AI will have human-like intelligence and capabilities.) Despite the increasing adoption of GenAI, the founding team at 9AI is fully aware that industry trends and investment strategies may undergo a paradigm shift in the current year. Until now, billions of dollars have been spent on foundation models as VCs are willing to bet big on original research and innovation. Now that the base has been built, thanks to OpenAI, DeepSeek and the like, investors could be more eager to fund enterprise tools and applications built on existing models and LLMs for sustainable growth and immediate profitability. Essentially, vertical AI may soon emerge as a more attractive investment choice, contrary to the horizontal approach, which became popular initially. It is difficult to predict future trends at this point, but 9AI is working smart, ensuring that no loopholes are left unattended. It has started offering industry-specific automation solutions from Day one, focussing on precision and targeting document-heavy, manual workflows that waste time and resources and drive costs. However, its R&D for deeptech innovations and niche models are, by no means, discarded. Yes, core research will call for substantial capital, but the outcome, as transformational as ChatGPT, will continue to attract big investors. Meanwhile, 9AI must cater to evolving enterprise needs while scaling effectively as AI adoption continues to reshape industries at a fast clip. With India positioning itself as a global AI hub, the coming years will test how well the company can adapt, innovate and carve its niche.

Can Nexizo Be The AI Moat For OfBusiness?

Nexizo has managed to gain 1 Mn registered users on the platform with about 400K monthly active users within a short span At a time when an increasing number of new-age tech ventures in the country are launching AI platforms for various business use cases -- from streamlining customer interactions with agentic AI to improving workflow management -- B2B ecommerce platform OfBusiness has sharpened its AI arsenal. Earlier this year, the company launched an AI platform, Nexizo, to help its existing customers gain deeper market insights and optimise their sales, logistics and inventory functions. Understandably, the company's AI push, in the form of Nexizo, has come at a crucial time, as the company gears up for a $1 Bn IPO, likely in the second half of 2025. But, what is OfBusiness up to when it comes to AI adoption and implementation, one may ask? To understand this, we spoke with OfBusiness' cofounder and chief business officer Nitin Jain, who said that Nexizo is OfBusiness' extended leap in the realm of AI. With this move, the startup has transitioned beyond just showcasing pricing and tender details to assisting enterprises with lead generation. Now, before we dive into what OfBusiness is trying to achieve with Nexizo, let's learn a thing or two about the Gurugram-based unicorn. Founded in 2016 by Asish Mohapatra, Nitin Jain, Ruchi Kalra, Vasant Sridhar, and Bhuvan Gupta, OfBusiness offers raw material procurement and financing solutions to SMEs in the manufacturing and infrastructure sectors. The categories of these services range from steel and chemicals to polymers and bitumen. The company, which achieved unicorn status in 2021, also runs a fintech arm, Oxyzo. OfBusiness' operating revenue jumped 25% YoY to cross the INR 19,000 Cr mark in FY24, while net profit surged 30% YoY to INR 603 Cr. The company claims to have impacted over 4 Lakh businesses via its tech, with deliveries to more than 13,000 SMEs. It is this user base data the company claims to be leveraging to train AI models and sharpen Nexizo. OfBusiness' Brush With AI Nexizo is not the company's first and only tryst with AI. According to Jain, OfBusiness had been experimenting with the emerging tech even before OpenAI stirred up a storm worldwide. Although at a small scale, the executive said, the startup already had machine learning (ML) models in place to showcase government tenders to its clients. Before the launch of Nexizo, its AI engine helped its BidAssist platform process and track over 25 Mn data points annually from more than 50 Mn tenders and documents. "We were the first ones in the B2B world to adopt AI. I, being a computer science engineer, have a passion for looking where I can plug AI into the organisation," Jain said. Therefore, with the advent of OpenAI's ChatGPT, the startup decided to automate client interactions. Jain launched a chat assistant that allowed its customers to access market prices of various raw materials. It also automated the process of sending various news articles about commodities to OfBusiness' clients. The platform was also updating prices of 10,000 commodities in real time. OfBusiness' Pivot To Proprietary AI However, this conversational platform functioned as a simple layer over an existing large language model (LLM). The company then realised the need to develop its proprietary AI. Soon, it focussed on building its own small language models (SLMs) by fine-tuning Llama with its in-house data pool for tender classification and information. "That's what Nexizo does - it showcases price and tender information to the clients. It's like a search engine where, if our clients ask, 'show me an INR 200 Cr tender in Nashik for energy', our fine-tuned LLM processes the request, performs tool calling, and fetches the relevant information," Jain said, breaking down the working of the platform. The company started training the open-source model with its existing data towards the end of 2023. After being live in the beta version for almost a year, Nexizo was launched around four months ago. According to Jain, bringing AI assistants to B2B businesses is inherently difficult because the average order value is high at INR 10 Lakh to INR 20 Lakh level. So, human interactions with the sales teams are unavoidable. Despite the challenge, Nexizo has managed to gain 1 Mn registered users on the platform with about 400K monthly active users within a short span. Our users can be put into two large buckets -- small enterprises and contractors, banks or NBFCs and raw materials suppliers. While small enterprises and contractors consume OfBusiness' information on infrastructure, building roads, rails, buildings, and bridges, the platform helps NBFCs and suppliers generate leads. Currently, the platform has about 20 to 25 enterprise clients. Meanwhile, the company's BidAssist platform is expected to slowly integrate into Nexizo. OfBusiness is also mulling a new pricing model. Earlier, BidAssist used to charge users to access tender information. Now, the company plans to earn by selling leads to enterprises while giving tender updates for free to its users. However, the company is still experimenting with Nexizo's monetisation strategy. OfBusiness' AI Thesis Even though Nexizo is a separate SaaS platform, the business is working because the product is related to OfBusiness' core offerings. "We have targeted people who are looking for tenders on OfBusiness' platform so that we can use that information to pitch the AI product to them. We again feed this data to train our model," said Jain. He believes that AI platforms in sync with their core businesses are there to stay in the long run. If not aligned, the platform must function as a separate business vertical. "You can't make it work in the existing companies as it requires a very different DNA. We started Nexizo because it has tender data for customers and infrastructure accounts for 30% of OfBusiness' revenue," Jain said. This is precisely why Jain bets big on the success of AI initiatives like Zomato's Nugget and NoBroker's ConvoZen.AI -- because they align with their respective companies' primary business models. However, according to the OfBusiness cofounder, most smaller enterprises are currently confused about AI, with many even wondering how to take the AI leap. "Many don't know how to implement AI, whether to use foundational models or fine-tune their own models, or use a wrapper. Even big enterprises are still struggling to find the right use cases of AI, and they often feel that the old practices are yielding better results," Jain said. Why AI Adoption Has Been A Challenge In India Despite too many tall claims, the adoption of AI has largely been a laggard, especially at the enterprise level. According to an Inc42 report, a majority of startup investors believe that most large-scale enterprises in India are struggling to transition their AI use cases from proof of concept to full-scale deployment. While 66% of India's top unicorns have started integrating GenAI into their offerings, only 15-20% of proof of concepts by large domestic companies in the country have progressed to production, the report finds. Upskilling the existing employees also remains a challenge that companies need to solve. In fact, Jain said the company did not hire any new talent to build the Nexizo platform, but upskilled the existing ones. Meanwhile, he also said that the ecosystem needs more examples from the startup ecosystem to show the way, calling Zomato a front-runner in sharing its own AI knowledge with the world with Nugget. Top startup leaders in India have reiterated that every business, big or small, must prioritise AI adoption to increase efficiency. Although slow, India's enterprise-level AI adoption landscape is not gloomy and is constantly evolving. Currently, Agentic AI is in the limelight. From Gupshup to Zomato's Nugget and from Infosys to Zoho - the industry is abuzz with the high autonomous capabilities of GenAI agents. As GenAI adoption grows on various fronts, expected to become a $17 Bn market opportunity by 2030, a focus on bridging the talent gap will go a long way.

Inside MakeMyTrip's GenAI Play -- How The Travel Giant Has Revamped Itself For The AI Age

Hiring for GenAI is difficult because this wave is only two years old in India, said Sanjay Mohan Last month, Nasdaq-listed Indian travel tech giant MakeMyTrip launched a GenAI-powered feature, Collections, on its platform to make hotel and homestay discovery smarter, easier, and more personalised. The feature leverages AI and deep traveller insights to intelligently find accommodations to match customer needs and preferences. Notably, MakeMyTrip is doubling down on the personalisation of user experience at a time when the GenAI wave has taken the industry by storm, and hyper-personalisation is the new norm. However, what could surprise you is that it is not the travel tech platform's first tryst with artificial intelligence (AI). In fact, the company's rendezvous with AI is now nearly a decade long. Over the years, the company has remained steadfast in its quest to maintain quality data to train and fine-tune its models, giving its customers features like zero cancellations and price lock ahead of time. However, with the advent of GenAI two years ago, it is now forced to relearn the rules of the game. This is where the company's Group CTO, Sanjay Mohan, sees a dearth of AI talent as a major hurdle, even as the company has largely kept itself ahead of the curve by constantly training its team on the subject. Having jumped on the GenAI bandwagon just two years ago, the company has been successful in integrating the tech into some of its operations such as email communication sent by executives to customers and streamlining content on its description pages, much is still left to explore. What's on the cards? Let's understand as Inc42 speaks with CTO Mohan in detail about the company's AI adoption journey, especially the prerequisites of embarking on this quest. For more on the $11 Bn company's AI journey, data collection and security, and GenAI adoption, here are the edited excerpts... Inc42: The rise of GenAI has put the spotlight on the adoption of AI in companies. How did MakeMyTrip start its AI journey? Sanjay Mohan: We started building our first data platform nine years ago. It took us several months to begin data collection and enter the production phase. This required building data science models, fine-tuning them, and testing and tweaking them as needed. We built a robust data pipeline in the company for almost two to three years before launching rich AI-enabled features for our customers about six years ago. The first use case of AI in our company was in personalisation. We started with personalising the look and feel of the home page for every user or cohort of users. Features such as 'zero cancellation fee', 'price lock', or other personalised offers have been created using this data pipeline and building mathematical models to use that data effectively. Inc42: When did you start using GenAI models? What are their use cases in the company? Sanjay Mohan: Our GenAI adoption started two years ago when there were only OpenAI's GPT models available. So, we just took off-the-shelf language models and started building analysis with those. Our key GenAI use cases include analysis, synthesis, and translation. For instance, individuals on their business trip may not require hotel reviews from people who stayed at a particular property with their families. This is where MakeMyTrip helps users with summarised reviews in two lines and provides information relevant to a particular user, so they don't have to go through hundreds of photo reviews. Besides, all the packages provided by MakeMyTrip have a one-page description. Earlier, these descriptions were written by humans, so uniformity of content was a concern. To remedy this, we used GenAI for content synthesis to give description pages a uniform. To make customer-facing communication error-free, we have also introduced a similar kind of uniformity in the email drafts for our call centre executives. With GenAI, we have also enabled users to book flight tickets by speaking in Hindi or English. This is where the translation capability of the large language models played a key role. After working with only off-the-shelf LLMs for a year, we are now focussing on building custom models tailored to different business lines, including flights, hotels, holidays, and ground transportation. Leveraging our domain knowledge, supply and demand insights and data, we have built custom models that are helping our customer care executives save at least 20% of their time. Besides, enquiry calls are now shorter and customers are more satisfied with our initiative of summarising the main points from the calls using GenAI models. However, we also understand that GenAI is not the solution for everything. GenAI has a fair use where data is unstructured or for enhanced multilingual interactions. Inc42: How have you adopted AI for the company's internal workflow? Sanjay Mohan: We use it a lot for monitoring. When running a large operation like MakeMyTrip does, with a huge customer base, we have to monitor our site availability, business metrics, and a bunch of other things at a network operations centre (NOC). Using AI, we have built a monitoring platform where we put thresholds, and if, for instance, bookings drop to a certain number, then the platform starts sending alerts. We started doing this nine years ago, and today, the platform sets these thresholds on its own. Inc42: How have the time and cost involved in training datasets changed over the years? Sanjay Mohan: The non-GenAI models that we built earlier were using standard large CPUs. The way technology was seven to eight years ago, it would take us around a quarter or more to train a model, and then three to four months to put it out in the market. That learning phase remains the same, even with GenAI. However, the training part has become much easier because we already have foundation models, which is almost 70% of the work. Though the cost involved is much higher for GenAI, there has been at least a 50X reduction in the cost of building these models in the last two years. This cost is expected to reduce further as these models get smaller. Meanwhile, we have started reaping the benefits of the initial few years we spent building our company's data pipeline. As per the standard industry metrics, 70% to 80% of data scientists' time goes into cleaning up data. It's a huge loss, and we could avoid that by building a very robust data platform where only quality data flows. We have all of these checks and balances in place. Inc42: What's your take on the talent crunch in AI? Has this been a challenge for you? Sanjay Mohan: Talent crunch has always been there. Be it India or the US, the entire world is witnessing a dearth of data scientists. If you look at the talent work that has been going on in the US for the last six to seven years, it has all been around data. But look at the big five or Magnificent Seven in the US, they are still fighting over talent. Inc42: How did you navigate through this challenge? Did you focus more on upskilling? Sanjay Mohan: We had to both upskill our existing talent and hire new people. Initially, when we didn't have a data science team, we had to get someone from outside to at least guide others. We have also trained many of our engineers to fill the talent gap. When we started, there was one team doing horizontal data science for all business lines. Now, every line of business has several people working on data science models. When such talent becomes pervasive in the company, and you have trained enough people to handle those models, that's the best state to be in. Unfortunately, it has only happened for the pre-Gen AI models. Now, with GenAI, we are again on the same track and have started training a pool of people skilled in this technology. We have groomed a few. Hiring for GenAI is difficult because this wave is only two years old in India. So, we need to look for talent that has been doing AI in general with some data science background, and a lot of curiosity to learn. Inc42: Does MakeMyTrip help enable AI adoption in other enterprises with its AI models or tools? Sanjay Mohan: Our models are our competitive moat. Being a leading provider of travel in India and the leading ecommerce site for travel, we treat data as our IP. I don't think anyone in India, in terms of data on the supply or data on the consumer, can come anywhere close to what we have put together over the years. If someone has to travel to or in India, they will most likely come to MakeMyTrip, and we treat this data as gold. There is no way that we would give that away to others. Besides, it's also about keeping the pool of our customer data safe. Inc42: With so much data in hand, what measures do you take to ensure the safety of that data, especially in the age of GenAI? Sanjay Mohan: I believe legislation like the Digital Personal Data Protection (DPDP) Act will play a significant role in ensuring data protection. But, we began our data anonymisation efforts several years ago, well before the DPDP was even considered. All of our data is anonymised for internal use, which means that employees only see an opaque UID, a unique user identifier. When sharing our customers' data with airlines or hotels, we have a contract in place to protect their data. Besides, we treat users' personally identifiable information and sensitive personal information the way credit card numbers are put behind a vault. Inc42: Various reports suggest that Indian enterprises are lagging in AI adoption. What's your take on it? Sanjay Mohan: I think people don't understand the value of data. It breaks my heart to see that hardly anyone cares about building a robust data platform where quality data flows. It's there in the US. Inc42: With the advent of AI agents, do you see the need for human intervention completely going away? Sanjay Mohan: I think the need for human intervention will remain. Even in software, no matter what you do, you can't automate everything. AI agents will make things more efficient. Even in the case of programming, people say agents will start writing code, and it won't need developers. I do not believe so.

Unveiling The GenAI Summit 2025 Agenda: What's Brewing In India's AI Space

Inc42 will host a series of interactive sessions, including keynotes, fireside chats, and panel discussions featuring leaders such as CoRover founder & CEO Ankush Sabharwal, Observe.AI CTO and cofounder Jithendra Vepa, Simpl CEO Nitya Sharma, MakeMyTrip's Sanjay Mohan, and many more In 2022, Nando de Freitas, a researcher at Google DeepMind, declared on X, "It's all about scale now! The game is over!" But was it? Fast forward to 2025, the AI landscape has shifted dramatically. Almost three years after OpenAI's ChatGPT brought in the Generative AI (GenAI) frenzy in 2022, a new young and ambitious company, DeepSeek, has now defied expectations by launching an open, smaller, and more efficient model at a significantly low cost that outperforms the heavily funded giants like OpenAI and Google Gemini. This is the essence of GenAI: constant reinvention and relentless innovation. What was groundbreaking yesterday is obsolete today. But what's happening in India, particularly? After much back and forth, the country has realised that the strategy of letting the West develop the base while India makes solutions on top of them won't work any longer. Now, the government is investing in acquiring world-class GPUs, inviting bids for India's Sovereign AI models, and prioritising a stronger AI policy. Meanwhile, the private sector is witnessing an increasing number of VC investments in vertical GenAI solutions, as the buzz is steadily shifting from chatbots to AI agents. Different perspectives, but that's the spirit of GenAI -- nobody is right or wrong in their approach. To capture this fast-evolving spirit and spark meaningful conversations, Inc42 is proud to present the second edition of The GenAI Summit 2025, taking place on April 9 in Bengaluru. Bringing together 350+ exclusive invite-only attendees - founders, policymakers, business leaders, and investors - the summit will decode the transformative potential of GenAI in India's startup economy. Inc42 has been at the forefront since the early days of GenAI, tracking its evolution and impact. Over the years, we've witnessed AI startups navigate the journey from nascent ideas to industry-defining breakthroughs. Now, it's time to discuss what's next. The GenAI Summit 2025: What's On Plate The Indian startup ecosystem is embracing the next phase of AI transformation, as GenAI continues to disrupt industries and redefine business strategies. The conversations around AI dominance, regulations, and its impact on jobs are only intensifying, making it imperative for tech leaders, investors, and policymakers to collaborate and navigate this evolving landscape. While early adopters have leveraged GenAI to automate workflows, enhance efficiency, and optimise decision-making, 2025 is poised to bring even more significant shifts. We know that GenAI will continue to redefine how consumers interact with brands and services, disrupt traditional software development and distribution, and reshape entire industries. The dilemma for startups and enterprises alike is no longer whether to integrate AI, though the challenge remains in how to do so effectively while staying competitive. Meanwhile, as we predicted in the fall of 2024, this year is already becoming the year of agentic AI. Most of the Indian IT giants have either committed to or launched AI agents as offerings to their clients. Notably, the GenAI Summit 2025 is India's premier AI-focussed conference, bringing together the most influential AI leaders, startup founders, investors, and enterprise decision-makers to debate, discuss, and showcase the future of AI-driven businesses. Founders, CTOs, investors, and AI pioneers will take the stage to explore trends in GenAI, practical applications of AI models, and India's place in the global AI revolution. Inc42 will host a series of interactive sessions, including keynotes, fireside chats, and panel discussions featuring leaders such as CoRover founder & CEO Ankush Sabharwal, Observe.AI CTO and cofounder Jithendra Vepa, Simpl CEO Nitya Sharma, Avataar founder Sravanth Aluru, MakeMyTrip's Sanjay Mohan, and many more. Spotlight On Sessions At GenAI Summit 2025 With a stellar lineup of speakers, the summit promises in-depth discussions on some of the most pressing topics in AI today. Here are some of the most anticipated sessions: Riding The Conversational AI Wave: What's Next? Conversational AI has evolved from chatbots to intelligent voice assistants and beyond. In May 2024, when OpenAI launched ChatGPT 4o, it started a wave of AI agents to fully automate business conversations with users. From conversational AI platforms like Gupshup to the listed B2B traveltech platform, TBO Tek, several companies have either started building and offering such services or have themselves integrated conversational AI on their platforms to serve their customers better. Besides, speech-to-speech models are becoming more popular. Voice bots developed by Indian startup CoRover are changing user experience across government platforms like IRCTC and NPCI. To explore and initiate more conversation around the evolution from chatbots to voice assistants, and, now, to conversational agents, how conversational AI is reshaping customer expectations, the use cases and challenges yet to be solved, and the role of AR/VR in shaping the future of conversational AI, and more, the GenAI Summit has brought together a panel featuring Ankush Sabharwal (founder and CEO, CoRover.ai), Garima Pant (head of AI at TBO Tek), Deepak Gupta (VP, engineering at CARS24), and Goda Ramkumar (VP, data science at Swiggy. The session will be moderated by Nitin Jain, cofounder and chief business officer at OfBusiness. Agentic AI: The Rise Of AI Decision-Makers Moving beyond simple automation, AI is now making complex business decisions. AI agents are now the talk of the town. From building websites to ordering groceries on your behalf, AI agents are now capable of doing everything with the least human intervention. Indian IT giants like Infosys have already built more than 100 AI agents, along with companies like HCL, TCS and Wipro announcing their own plans for AI agents. Meanwhile, startups like Pulse, Atomicwork, and Quash have raised millions of dollars in funding in recent months to go big on Agentic AI. To discuss the developments in this new area of AI, the implications, governance risks, and the balance between AI autonomy and human oversight, the panel will feature Jithendra Vepa, CTO and cofounder of Observe.AI; Vijay Rayapati, cofounder and CEO of Atomicwork; and Karan Mehta, founder of Rezolv along with founder and managing partner of Ideaspring Capital, Naganand Doraswamy, as the moderator. Fintech's AI Gamble: Disruptive Force Or Risky Bet? Financial services and the overall BFSI sector have been the largest and initial adopters of GenAI in India. Banks, NBFCs, and lending and insurance players are using the technology for use cases including hyper-personalised banking experience, AI-driven credit scoring, risk management, and underwriting loans. The Reserve Bank of India (RBI) is also mulling models for 'predictive' analysis of the markets, particularly the use of AI and machine learning. In this panel, experts will discuss whether AI is a game-changer or a regulatory minefield for fintech firms, the dilemma of developing AI in-house or leveraging third-party AI solutions, cost reduction and customer retention, and whether AI-native startups will outpace traditional players. Simpl's cofounder and CEO Nitya Sharma, OnFinance AI's cofounder and CEO Anuj Srivastava, and Razorpay's chief product officer Khilan Haria are among the panelists. Tech Giants Vs. Startups: A Lopsided AI Race? As AI infrastructure costs soar, can startups compete with tech giants? At one end are companies with billions of dollars to invest, having their own data centres and a wide pool of researchers. On the other end are startups -- cash-crunched, but motivated, talented, and aiming to catalyse GenAI adoption in India. But can many startups replicate the success of the big techs? This session will examine whether open-source AI solutions can level the playing field and what monetisation strategies make sense for AI startups, the challenge of AI infrastructure costs, hurdles in access to data, and investor appetite for AI-first startups. Moderated by Hari Balaji, partner, technology consulting at EY India, the speakers for the session include Arjun Rao, general partner at Speciale Invest, Ganesh Gopalan, cofounder and CEO of Gnani.ai, Ankit Prasad, founder and CEO of Bobble AI, and Shivam Mangla, cofounder of Rephrase.ai. How GenAI Is Reshaping Retail Brands: From Prototyping To Pricing Retailers are leveraging AI for product design, pricing optimisation, and marketing automation. However, what can be the exact impact of GenAI on retail brands? This discussion will cover AI's impact on personalisation, consumer trust, the retail sector's future beyond 2025, content creation, ads, and more pertinent topics like data privacy. We have brought together Sravanth Aluru (founder and CEO of Avataar), Sreeraman Mohan Girija (cofounder of Fynd), and Vaibhav Khandelwal (cofounder and CTO of Shadowfax). Archana Jahagirdar, founder and managing partner of Rukam Capital, will moderate the session. Join The GenAI Revolution The GenAI Summit 2025 will be a defining moment for India's AI ecosystem, featuring exclusive insights from industry pioneers, networking opportunities with investors and entrepreneurs, and showcases of cutting-edge AI technologies. The Summit will also feature several other sessions, including The Indic LLM Question: Inside Sarvam's Journey, Rewiring Business Stacks With GenAI, Building The Bharat Model Of AI, Leveraging AI To Empower MSMEs In A Digital-First Economy, AI In Healthtech, and The SaaS-AI Fusion: Reinventing Enterprise Software. Stay ahead of the AI curve and be part of the conversation shaping the future of GenAI in India. Get your access now!