India’s HCLTech has announced a strategic investment in Bengaluru-based generative AI startup–Sarvam AI–committing approximately $150.7 million for a 10.5% stake. The deal makes HCLTech the lead strategic investor in Sarvam’s Series B funding round.
The funding round values the startup at $1.5 billion, making it one of India’s latest AI unicorns. As part of the transaction, HCLTech will acquire 41,421 equity shares and support Sarvam’s efforts to develop advanced AI models focused on agentic systems, software development, and cybersecurity applications. Sarvam has secured $234 million in the first close of a planned $300 million raise.
According to HCLTech, the partnership will help expand the development of specialized language models and AI-powered solutions for its global customers. The company also sees the collaboration as an opportunity to accelerate sovereign AI initiatives aimed at governments and highly regulated sectors that require greater control over data and infrastructure.
“Reflecting on the last few years of the founding journey, my conviction has only deepened…AI will be far more consequential than most of us realize even today,” Pratyush Kumar, co-founder of Sarvam AI, said. Sarvam was founded by Vivek Raghavan and Pratyush Kumar in August 2023.
“We are going to push hard across every layer of the company, but the thing that excites me most right now is our shot at building frontier-class AI systems from India. We are assembling the team, the compute, and the deployment engine to make this happen,” Kumar added.
The deal is a significant milestone for India’s AI ambitions. Despite being one of the world’s fastest-growing markets for AI adoption, India has produced relatively few startups building frontier-scale AI models. High computing costs, limited access to advanced chips, and the large capital requirements associated with model training have made it difficult for local companies to compete with rivals in the United States and China.
“HCLTech’s partnership opens joint opportunities to bring our research and platform to many of HCLTech’s clients – this is also a unique template to bring together India’s strengths,” Kumar pointed out.
The Series B round was co-led by Bessemer Venture Partners, with existing backers Khosla Ventures and Peak XV Partners also participating. HCLTech’s investment accounts for roughly $150 million of the capital raised so far.
The funding comes more than two years after Sarvam raised a combined $41 million through its seed and Series A rounds. It also follows the launch of the startup’s open-source AI models with 30-billion and 105-billion parameters earlier this year.
Why this matters for India’s startup ecosystem
HCLTech’s backing signals that India’s established technology services giants are willing to make substantial bets on homegrown AI innovation rather than relying solely on global model providers. The investment also demonstrates that Indian startups working on deep technology and foundational AI can attract large-scale strategic capital, a development that could encourage more entrepreneurs and investors to pursue ambitious AI ventures.
More broadly, Sarvam’s rise reflects a shift in India’s startup ecosystem from consumer internet and software services toward the development of core AI infrastructure, models, and platforms. If successful, the company could help create a blueprint for building globally competitive AI businesses from India while supporting the country’s push for technological self-reliance.
The investment also highlights the growing importance of sovereign AI. As countries and corporations seek greater independence from foreign AI providers and infrastructure, demand is rising for domestically developed models, computing resources, and AI platforms. Sarvam is positioning itself at the center of that trend in India.
For Sarvam, the partnership provides more than capital. HCLTech brings a large enterprise customer base, global delivery capabilities, engineering talent, and established software assets that could help accelerate the commercialization of Sarvam’s technology. Together, the companies aim to develop AI products for enterprises and public-sector organizations.
Sarvam is one of the few Indian startups attempting to build a vertically integrated AI business. Its work spans foundation model development, inference infrastructure, and enterprise software applications. The company says its models are tailored for Indian languages and local use cases, with deployments already underway across industries such as banking, insurance, government services, and defense.
India bets big on deep-tech startups
The Sarvam AI deal comes amid broader efforts to strengthen India’s deep-tech ecosystem. Through policy reforms and dedicated funding initiatives, the federal government is seeking to create a more supportive environment for startups developing cutting-edge technologies such as artificial intelligence, robotics, quantum computing, and biotechnology.
The Indian government plans to strengthen support for deep-tech innovation through its ₹10,000-crore (roughly $1.24 billion) Fund of Funds scheme. Announcing the initiative in April 2025, Commerce Minister Piyush Goyal said the funding would help accelerate the growth of startups working on frontier technologies such as AI, machine learning, robotics, quantum computing, biotechnology, and advanced manufacturing.
“This is the base. This is the foundation on which I am confident India will foray in a very big way into the world of innovation. We will make our presence felt at the global stage on products of deep significance, whether it is deep tech, AI, machine learning, or how we can do data analytics smarter and better,” Goyal said in April last year.
In July 2024, while presenting the Union Budget for 2024-2025, Finance Minister Nirmala Sitharaman announced the removal of the controversial angel tax, a move aimed at encouraging entrepreneurship and improving the funding environment for startups. Under the earlier framework, capital raised by startups from investors could be classified as “income from other sources” if authorities deemed the valuation excessive, exposing such investments to tax liabilities of up to 30%. The provision had long been criticized for placing an additional financial burden on early-stage companies that rely heavily on external funding to grow.
India has emerged as the world’s third-largest startup ecosystem, supported by widespread internet penetration, a large pool of young talent, and increasing digital adoption. The country is home to more than 73,000 startups with at least one woman director and has produced over 100 unicorns. Over the past decade, Indian startups have become important contributors to innovation, job creation, and the development of technology-driven solutions for both domestic and global markets.