IT major HCLTech will lead a $150-million funding round in homegrown frontier artificial intelligence startup Sarvam AI, valuing the Bengaluru-based company at around $1.5 billion, sources aware of the matter said. The proposed round is among the largest fundraises by an Indian AI startup so far and marks a significant bet by a traditional IT services company on the fast-evolving generative AI ecosystem.
HCLTech did not reply to an email seeking comments on the development.
The investment comes at a time when India’s $250-billion IT services industry is grappling with rapid shifts triggered by AI-native companies and automation-led software tools. Over the past several months, investor concerns over the long-term impact of generative AI on conventional outsourcing models have weighed on Indian IT stocks, especially after companies such as Anthropic and OpenAI expanded enterprise offerings and consulting capabilities. Technology stocks have been under pressure after the two companies announced plans to deepen their AI consulting and deployment businesses, potentially competing with traditional IT services firms.
The changing landscape is prompting Indian IT companies to invest more aggressively in AI infrastructure, foundational models and related capabilities. Rival Tata Consultancy Services, for instance, has been expanding its presence in the AI data centre segment as demand for computing infrastructure rises globally.
Founded in 2023 by Vivek Raghavan and Pratyush Kumar, Sarvam AI positions itself as a full-stack sovereign AI platform focused on building foundational models for India. The startup has gained attention for its work in Indic-language AI and voice-based applications tailored for Indian users and enterprises. Earlier this year, during the IndiaAI Impact summit, the company unveiled two new open-weight large language models in addition to five AI models it had previously developed from scratch.
The company also showcased AI-powered smart glasses at the event, signalling ambitions beyond software models and into emerging AI hardware and wearable segments.
Sarvam AI had earlier raised $41 million in a Series A funding round in 2023 led by Lightspeed, with participation from Peak XV Partners and Khosla Ventures. The latest funding round, if completed, would sharply raise the company’s valuation and strengthen its position among a small group of Indian startups attempting to build foundational AI technologies locally.
The funding activity also reflects rising investor appetite for AI-focused ventures in India. More recently, vibe-coding startup Emergent raised $70 million within months of its previous financing round, underlining growing capital flows into the country’s AI ecosystem.
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This article was first uploaded on May fourteen, twenty twenty-six, at fifty minutes past five in the evening.