AI investments surging in India; AI share in venture capital funding rises to 12% from 5% in 2020: Report

New Delhi [India], February 23 (ANI): Investments in Artificial Intelligence (AI) and deep tech sectors are gaining strong momentum in India, with AI's share in Venture Capital (VC) funding rising to about 12 per cent from under 5 per cent in 2020, according to a report by India Deep Tech Alliance.
The report highlighted that AI startups emerged as the standout theme in 2025, reflecting growing investor confidence in technology-led innovation and real-world applications across sectors.
In 2025 alone, AI companies attracted 188 investments worth USD 1.2 billion, marking a 58 per cent year-on-year increase in funding value. The report noted that this surge reflects rising adoption of AI across enterprise software, healthcare, financial services, cybersecurity, and industrial applications.
It stated "AI now accounts for about 12 per cent of total VC funding, up from under 5 per cent in 2020, representing significant growth. Looking more broadly, deep tech investment has reached critical mass".
The report also highlighted that deep tech investment in India has reached critical mass over the years. Since 2016, nearly USD 28 billion has been invested across more than 2,100 deep tech deals. Deep tech now represents around 15 per cent of total private equity and venture capital activity, compared to just 4 per cent a decade ago.
The report noted that even as overall venture capital activity moderated in 2025, investment momentum remained strong in technology-led sectors. Total VC investment in India remained steady at about USD 10 billion in 2025, but within that, AI and deep tech sectors sharply outperformed, indicating a shift in investor priorities.
This trend reflects a fundamental shift from consumer-led growth to science, engineering, and intellectual property-driven innovation.
The report also highlighted strong diversification within the deep tech sector. While AI continues to dominate, significant momentum is also visible in space technologies, semiconductors, robotics, advanced manufacturing, med tech, energy, and climate technologies.
Encouragingly, early-stage deep tech investments have more than doubled over the past five years, indicating a growing pipeline of future technology leaders and sustained investor interest in innovation-driven sectors.
'India Deep Tech Alliance' is an industry-led consortium of leading Indian and Global Investors who have come together to accelerate deep-tech entrepreneurship in India and align with national innovation priorities. (ANI)