India AI Mission Startups Face Funding Test Amid Shifting AI Economics

Twelve startups backed by India's ₹10,372 crore ($1.2 billion) government AI mission are set to showcase their models at the AI Impact Summit 2026, facing their first major test in a rapidly shifting global AI landscape.

The India AI Mission, launched in March 2024, was designed to address the high cost of computing power that policymakers saw as the primary barrier to domestic AI development. The program provides startups access to government-subsidized GPU infrastructure through data-center operators.

But the economics of AI have evolved significantly since the mission was announced. Advances led by China's DeepSeek have pushed down the perceived cost of training models, even as Nvidia continues to dominate advanced AI chips. This shift has put New Delhi's compute-led strategy under scrutiny.

Sarvam became the first startup to receive access to the mission's shared compute infrastructure in April 2025, followed by Soket AI Labs, Gan AI and Gnani (focused on audio-first AI models). In the latest funding tranche, BharatGen (incubated at IIT Mumbai) became the first Indian entity to secure more than $100 million in a single AI funding round tied to the initiative.

Kashyap Kompella, founder of tech consultancy RPA2AI Research, said the summit offers these startups rare exposure to global partners and investors. "The key beneficiaries would be private startups and enterprises who get access to global business partners and investors—and will get the kind of growth and networking opportunities that you don't get otherwise in India."

The event also reflects India's push for AI leadership following Prime Minister Modi's speech at the AI Action Summit in France last year.