Krutrim abandons AI model ambitions, pivots to cloud services after leadership exodus

India's first GenAI unicorn shifts to cloud services as AI model ambitions face reality | TechCrunch

Krutrim, India's first GenAI unicorn, is shifting from AI model development to cloud services after months of relative quiet on product updates -- a move that reflects the tougher economics of building large-scale AI systems. On Tuesday, Krutrim said it was moving toward cloud services, adding that the shift follows a business overhaul in late 2025 that included reallocating capital and talent and pausing chip design efforts. The update comes more than a year after the Bengaluru-based startup released its Krutrim-2 base model. The move follows a period of limited public activity from Krutrim, which has not made any significant product announcements in recent months, with its last post on X dating back to December. The startup did not appear in any of the sessions at India's AI Impact Summit in New Delhi, where global players such as Anthropic, Google, and OpenAI took part. In contrast, rival Sarvam participated in multiple sessions at the six-day AI event, where it showcased new open-source models, hardware developments, and commercial partnerships. The changes also come after a series of layoffs at Krutrim over the past year, with more than 200 roles cut across multiple rounds, according to local media reports. The startup pulled its Kruti AI assistant app from app stores in April. Founded by Bhavish Aggarwal (pictured above), who also leads ride-hailing firm Ola and EV maker Ola Electric, Krutrim had initially positioned itself as one of India's earliest GenAI contenders, seeking to build domestic alternatives to models from companies such as Anthropic, OpenAI, and Elon Musk's xAI. The startup raised $50 million at a $1 billion valuation in January 2024, reflecting early investor enthusiasm for India's homegrown AI ambitions, even as AI funding in the country remains far smaller than in the U.S. Krutrim said it generated about ₹3 billion (around $31.52 million) in revenue in the financial year 2026, a threefold increase from a year earlier, along with its first annual net profit and margins exceeding 10%. The startup did not disclose how much of that revenue came from external customers versus its parent Ola's ecosystem. Earlier reports had indicated that about 90% of its revenue in FY25 came from group companies. However, Krutrim said it is seeing growing demand for its AI cloud services, with more than 25 enterprise customers across sectors including telecom, financial services, and healthcare. It added that most of its GPU compute capacity is already committed to external workloads. Sanchit Vir Gogia, chief analyst at Greyhound Research, said the move toward cloud was commercially sensible, but cautioned that Krutrim's profitability claims would need to be tested. "The standard of proof must rise with the claim," he told TechCrunch. While Krutrim shifts toward cloud infrastructure, rivals such as Sarvam have continued to release new AI models and sign partnerships, including a recent one with space-tech firm Pixxel to develop an AI-driven orbital data center. As Gogia notes, infrastructure may be the more viable near-term play in India's AI market, even as the longer-term ambition of building competitive models persists. Krutrim did not answer questions on its exact revenue mix, enterprise customer base, and recent restructuring.

Ola's fullstack AI ambition bites the dust amid funding constraint, leadership exits

Krutrim, Ola founder Bhavish Aggarwal's ambitious AI venture, has seen a significant leadership exodus and workforce reduction. Key AI and semiconductor leaders, along with over 60 linguistics staff, have departed as funding dried up, leading to the discontinuation of its AI agentic platform and the Bodhi 1 chip. The company is now pivoting to AI cloud services. Ola Krutrim's AI bulwark crumbled as the three key leaders, Chandra Khatri, Sunit S, and Raj Kiran, leaders of Krutrim's AI initiatives, and close to 10 executives in its semiconductor arm quit the company. Assembly Elections 2026 Election Results 2026 Live Updates: Who's ahead in which stateWest Bengal Election Results 2026 Live UpdatesTN Election Result 2026 Live Updates Khatri was the founding head of AI and based in Silicon Valley in the US, Sunit was heading design and Raj Kiran led the AI research group, exited the firm in the past quarter. Senior leaders of the semiconductor efforts include Sanjeeb Ghosh, Vyasa Maharshi Grandhi, Rathina Balan Thalaiappan, Vishnu KGJ and Maruthi Srinivas Narasimhan who have also left the company in the last six months, ET has learnt. The company also laid off over 60 people in linguistics in early January, the last of the company's data annotation team for its AI models. From 2025, the firm laid off over 200 people in its linguistics team, ET had earlier reported. The company had to pause the work on AI models and semiconductors as funding dried up and leadership haemorrhaged, sources aware of the development told ET. The company has also discontinued its AI agentic platform Kruti, which was removed across the app stores of Google and Apple, and was not accessible on the web. Krutrim has not responded to ET's specific queries about its operations. However, after ET sent its queries, Krutrim issued a press statement, where it said it is pivoting to AI cloud services. "This repositioning follows a business realignment undertaken in late 2025, which involved a deliberate reallocation of capital and talent, including a pause on chip design initiatives to concentrate the company's resources on building and scaling its core AI cloud services stack," the statement read. Krutrim, founded by Bhavish Aggarwal, was launched in 2023 with an ambition of building AI models from India rivalling global platforms such as OpenAI. The firm raised $50 million in 2024 becoming India's first AI unicorn. Aggarwal also made a Rs 10,000 crore commitment to develop Krutrim in February 2025. The plan was to have a full stack AI platform including large language models for language, speech and vision, semiconductors and cloud platform. Also Read: Ola's AI smart assistant 'Kruti' goes dark across app platforms Most of this has now unravelled. "To build models and semiconductors, you need funding, which the company was unable to get. So, over the past year, the company has been reducing the workforce," said a former executive of Krutrim. Over the last year, multiple people from Ola Electric and other teams were moved to Krutrim. "These members are now being pulled back into other teams now," the executive added. The Bodhi 1 chip, which was expected to be released in 2026, now stands scrapped. "Currently, the chips the company procured for training models are being used to run simulations for Ola Electric scooters," another industry source told ET. Krutrim Cloud and maps are the only surviving products. A former employee, aware of the developments, said that Krutrim Cloud's largest user has been Ola, and it has been courting external clients. ET had earlier reported that the division currently employs 100 people. The company did not respond to ET's specific questions about its GPU and cloud operations. However, in the press statement, it said its cloud is seeing increased adoption with over 25 enterprise customers including leading telecom service providers, financial institutions, and consumer internet platforms. It also added that Krutrim's GPU compute capacity is witnessing strong external demand, with most of the capacity already committed to external enterprise workloads.