DBT Bureau
Bengaluru, 16 July 2024
After showing a significant surge, funding in AI-powered startups in India declined massively in the April-June quarter.
Funding for AI startups in India stood at $8.2 million in the April-June quarter, declining about 91% sequentially and by 82% year on year, The Economic Times reported citing research firm, Tracxn.
According to the report, AI startups accounted for only about 0.3% of the total tech startup funding. Total funding in tech startups stood at about $3 billion in the June quarter.
So far this year, Indian AI startups have raised nearly $96 million, which is a 61% increase over the same period in 2023.
Experts are of the opinion that investors are cautious about putting more funds into AI-powered startups in the absence of clear, profitable use cases amidst a fragmented investment landscape with numerous AI startups, the report noted.
While investors in India taking a backseat in funding AI- startups, global euphoria about this space continues unabated.
According to Crunchbase, investments in US-based startups surged to $24 billion during the April-June period, which is more than double from the previous quarter.
Five out of six billion-dollar rounds were secured by AI companies during this period. Notable deals included Elon Musk’s xAI raising $6 billion and AI infrastructure provider CoreWeave securing $1.1 billion among others. Experts are of the opinion that the AI-based startup ecosystem has to come up with innovative solutions that solves specific business problems, failing which the initial rush to pour in money will dry up.
