Update: 2026-05-15 16:58 IST
India’s technology sector may finally be entering a new phase in the artificial intelligence race. HCLTech is reportedly preparing to invest $150 million in Bengaluru-based startup Sarvam AI at a valuation of nearly $1.5 billion, according to a Moneycontrol report. The proposed investment comes at a time when Indian IT companies are under increasing pressure to adapt to the rapid rise of AI-driven businesses and automation tools.
The funding round is expected to be led by HCLTech, while Sarvam AI may raise an additional $150 million from other investors. Reports suggest that chipmaker Nvidia could also participate in the round. If completed, the deal would become one of the largest fundraising rounds for an Indian AI startup so far.
The development is particularly significant because it marks a rare move by a legacy Indian IT services giant to place a substantial bet on a domestic AI company. For years, companies such as HCLTech, TCS, Infosys, and Wipro have largely focused on integrating global AI platforms into enterprise services rather than building or backing foundational AI technologies within India.
The investment also reflects the growing urgency within the IT services industry as global AI firms like OpenAI and Anthropic continue to reshape the software and SaaS landscape. New AI-powered tools and autonomous coding systems have triggered concerns across the Indian outsourcing sector about the future of traditional software services.
Despite these fears, HCLTech has already partnered with OpenAI to help clients deploy enterprise AI solutions. Other Indian IT firms have signed similar agreements as businesses rush to adopt generative AI technologies.
Sarvam AI, meanwhile, has steadily positioned itself as one of India’s most promising AI startups. Founded in July 2023 by Vivek Raghavan and Pratyush Kumar, the company focuses on building sovereign AI systems designed specifically for Indian users and enterprises. Its work largely revolves around Indic-language AI, voice technologies, and enterprise-grade AI deployment tools.
The startup has already gained attention for its proprietary models, including Vision and Bulbul, which reportedly outperformed ChatGPT and Google Gemini in select tasks. Earlier this year, at the IndiaAI Impact Summit, Sarvam AI introduced two open-weight large language models with 30-billion and 105-billion parameters that were trained entirely in India.
The company also showcased AI-powered smart glasses during the summit, an event that drew further attention after Prime Minister Narendra Modi was seen wearing the device.
Sarvam AI expanded its consumer ambitions in February by launching the beta version of the Sarvam Indus mobile app for Indian users.
The latest funding discussions arrive amid criticism that Indian IT firms have been slow to invest aggressively in AI innovation. Industry observers have often pointed out that newer AI-native firms such as Anthropic have already achieved valuations that surpass several established Indian technology companies.
If the HCLTech-Sarvam AI deal materialises, it could represent more than just another funding round. It may signal a broader shift in India’s technology ecosystem — one where traditional IT giants begin actively backing homegrown AI innovation to stay competitive in an increasingly AI-first world.