India's GenAI Ecosystem Triples in Terms of Startup Quantity

India's Generative AI (GenAI) ecosystem has witnessed remarkable growth, with the number of startups surging 3.6 times, from over 66 in the first half of 2023 to more than 240 by the first half of 2024, according to a Nasscom report. This growth positions India as sixth globally in terms of GenAI startup ecosystems among major economies. Bengaluru remains the hub for GenAI startups, housing 43% of them, while emerging hubs like Ahmedabad, Lucknow, Surat, and Kolkata are also gaining momentum, now representing 18% of the ecosystem.

Despite most startups being in their early stages, they have collectively attracted over $750 million in funding since 2023. Notably, 75% of these startups were generating revenue by mid-2024, a significant leap from just 22% in the same period the previous year. The GenAI landscape in India has undergone substantial change, driven by innovative product launches and a focus on areas like managed large-language models (LLMs) and data-driven services.

Sangeeta Gupta, SVP and Chief Strategy Officer at Nasscom, emphasized the importance of prioritizing funding for high-potential GenAI startups and the need for collaboration to make India a global leader in AI. The ecosystem's expansion is largely fueled by the launch of 17 native GenAI language models, a 4.6 times increase in GenAI services, and a significant rise in startups offering GenAI assistants, which now account for 80% of newly-added startups.

Around 43% of GenAI startups in India are adopting a hybrid approach, combining closed and open-source models to provide solutions. This flexibility has supported growth across infrastructure, applications, and services. Additionally, 70% of startups are delivering industry-specific solutions across sectors like IT, retail, healthcare, BFSI, education, and media.