From foundational AI ambitions to IPO sprints and fintech scrutiny, India’s digital ecosystem is transforming under public-private fuel and policy pressure.
The Rise of Sovereign AI: From Aspiration to Execution
2025 marked a turning point in India’s AI journey. The idea of building Sovereign AI—indigenous foundational and large language models—evolved from academic chatter to a strategic imperative. The trigger was geopolitical and economic: China’s DeepSeek launched high-performing, low-cost models, underlining India’s dependency on Western tech as a vulnerability.
The response? Swift mobilisation. The IndiaAI Mission was accelerated, with 12 AI companies—including Sarvam AI, Gan.AI, BharatGen, and Soket AI—chosen to spearhead the sovereign push.
- Key Focus: Ensuring India owns its data and intelligence.
- Geopolitical urgency pushed vague plans into concrete execution.
Fueling AI Dreams: India’s GPU-Driven Push
While venture capital flowed toward application-level AI, foundational model builders faced a capital and infrastructure crunch. The Indian government stepped in with a resource that even billion-dollar startups struggle to access: GPUs.
- Allocation of Nvidia H100 clusters gave startups computing power crucial for R&D.
- This GPU subsidy strategy is bridging the innovation-capital divide.
- Successes like BharatGen’s 3 billion parameter model and Fractal’s open-source projects are early validation points.
The “UPI Model” for AI: A New Playbook
India isn’t replicating the capital-heavy US model or China’s state-controlled AI labs. Instead, a Public-Private Partnership (PPP) is emerging—a “UPI moment” for AI.
- Emphasis on domain-specific Small Language Models (SLMs) in healthcare, STEM, and governance.
- The PPP blends government compute, academic research, and startup agility.
- Goal: Make India a deeptech creator, not just a consumer of foreign tools.
Can this lean, decentralised model outpace trillion-dollar tech titans? Early momentum suggests it’s possible, especially in cost-effective, high-impact domains.
Snapdeal Parent AceVector Eyes IPO as Finances Improve
Snapdeal’s parent, AceVector, has filed its updated DRHP with SEBI, targeting a ₹300 Cr fresh issue and an OFS of 6.39 Cr shares. This IPO could mark a pivotal return for a company that once rivaled Flipkart.
- Revenue up 35% YoY to ₹244.4 Cr in H1 FY26.
- Losses down 80% YoY to ₹22.4 Cr—signalling sharper focus on profitability.
- Consolidated operations include Snapdeal, Unicommerce, and Stellaro Brands.
OneCard Under Regulatory Fire
Fintech firm OneCard is facing RBI scrutiny over data-sharing practices. Its partner banks have been instructed to halt issuance of co-branded credit cards.
- RBI’s crackdown highlights rising concerns around consumer data usage.
- Despite regulatory heat, FY24 revenues jumped 163% YoY to ₹1,425.6 Cr.
- Losses held steady at ₹401.1 Cr, reflecting capital-intensive growth.
New-Age Tech Stocks Tumble
December’s first week saw a $3 Bn wipeout in new-age tech market cap. Of the 47 companies tracked, 35 posted declines, some steep.
- DroneAcharya plunged 29.13% after SEBI actions.
- Ola Electric hit new lows amid competitive and internal struggles.
- Only a few, like Capillary Technologies and PhysicsWallah, posted gains.
The uneven performance exposes the fragility of startup valuations in a turbulent funding and policy climate.
AppsForBharat’s Losses Mount Amid Expansion
Spiritual tech platform AppsForBharat posted a 16% wider net loss at ₹45.3 Cr in FY25, even as revenue surged 3.8X to ₹69.6 Cr.
- Expenses doubled, outpacing growth.
- App “Sri Mandir” claims 5.2 Mn rituals conducted across 70+ temples.
- The spiritual-tech sector, projected to hit $135 Bn by 2034, is gaining steam thanks to digital adoption and Gen Z interest.
Layoffs Mount as Efficiency Takes Priority
9,500 job cuts across 44 Indian startups in 2025 marked a rise from 2024, though still lower than 2023’s peak.
- Ola Electric led with 1,000+ layoffs, followed by BluSmart (800).
- Companies cited AI-driven automation, shutdowns, and cost-cutting as reasons.
- Sectors hit hardest: mobility, gaming, logistics, and low-scale consumer tech.
India’s tech landscape is in flux. With Sovereign AI gaining policy backing and infrastructure support, and IPO-bound firms like AceVector signaling renewed investor confidence, the ecosystem is evolving fast. However, fintech regulation, startup layoffs, and market instability highlight the challenges of sustainable growth in the digital decade.
