AI investments in India witnessed a significant rise in the second quarter of the fiscal year 2025, according to a new report by Nasscom. The latest "Generative AI Tracker: Tech Industry Activity" covers developments from July to September 2024, with a focus on key advancements by leading Indian tech companies. This quarter's report highlights the rapid evolution of Generative AI platforms offered by select technology service providers, along with a detailed analysis of global trends, startup funding, and deal activity.

Growth in India's Generative AI Sector
The report shows a remarkable six-fold quarter-on-quarter increase in Generative AI investments, with a particular emphasis on B2B and productivity platforms. The second quarter saw a record 20 funding rounds, a sharp recovery from a slowdown in the previous period. Total funding in the AI sector grew 3.4 times compared to the same quarter last year, largely driven by enterprise AI applications and advanced AI tools. Early-stage investments dominated the quarter, making up 77% of funding, including significant contributions from angel and seed investors.

Key Insights and Highlights

Global Generative AI Developments

Global Funding Trends: Global funding for GenAI startups dropped by 2.3 times in Q2 FY25 compared to the first quarter, although the number of funding rounds reached a record high.
Emergence of Unicorns: New unicorns accounted for about 20% of the quarter’s total funding.
High-Value Deals: Big-ticket investments over $150 million rose by 1.8 times quarter-on-quarter.
Data Center Expansions: A substantial portion of investments went into enhancing data center capacities, especially in emerging markets.

Indian Generative AI Landscape

Rise in Indian GenAI Investments: There was a notable increase in investments for Indian GenAI startups in Q2 FY25 following two quarters of subdued activity.
Funding Activity: Funding rounds for Indian startups continued to grow in this quarter.

Indian Tech Industry Developments

Moderate Industry Activity: After a strong first quarter, the overall tech sector saw moderate activity. However, there was an increase in partnerships and a growing revenue pipeline.
Focus on AI Skilling: The industry is moving towards advanced AI upskilling, progressing from basic GenAI literacy to more specialized training.

GenAI Platforms in India

The report provides an overview of Indian tech providers' GenAI platforms, outlining key features and benefits. It includes a showcase of platforms launched since 2023, demonstrating the growing focus of Indian tech firms on leveraging Generative AI.
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