Bengaluru: India's AI startups are raising more money, but most of it is going to a handful of companies building models and computing infrastructure. In the first nine months of 2026 they raised $1.6 billion across 81 rounds, against $677 million a year earlier, according to Tracxn data.
The number of rounds fell 43 per cent from 142, and the number of companies that raised money dropped 44 per cent to 70 from 126.
Four deals accounted for 72 per cent of the total: Neysa's $600 million round, Sarvam's $255 million, Yotta's $150 million and Emergent's $130 million.
'AI funding has risen in dollars but not in the number of deals, and almost all of the rise comes from AI infrastructure rounds,' said Neha Singh, co-founder of Tracxn. Without those large rounds, funding would have declined, she said.
AI infrastructure took $1.2 billion across 19 rounds, 75 per cent of the total and 8.3 times the $145 million of a year earlier, even as the number of rounds fell from 29. Neysa and Yotta together raised $750 million for AI cloud and computing, while Sarvam raised $346 million across two rounds to build foundation models.
Startups building AI applications raised $390 million across 62 rounds, down 27 per cent from $532 million across 113 rounds. Funding for vertical AI, which serves specific industries, fell 87 per cent to $41 million from $319 million. Consumer AI applications drew just $1 million across three rounds.
Enterprise AI applications were the exception, raising $348 million, up 70 per cent from a year earlier.
Companies are interested in AI but slow to sign a real purchase order, one investor said, and a startup can lose a year in pilots that go nowhere.
The numbers point to a clear split in India's AI ecosystem. Capital is pooling around compute and foundation models, while the smaller firms building services on top of them struggle to raise money.