A report by Nasscom underlines the surge witnessed by the Gen-AI startups in India while the world lags in the financial impetus received by the industry in funding. 

The Surge 
The industry witnessed a surge in funding for Gen-AI startups, especially ones dealing in B2B solutions and AI agents. The funding for Gen-AI Startups in India reached a high of $51 million in the Second Quarter, which roughly translates into a Six-times increment from the preceding quarter. 

The industry witnessed 20 rounds of funding in total, raising the number of rounds witnessed by the industry, after witnessing 2 slow quarters. 

Major Recipient 
In the $51 million funding received by the industry, the major recipients remain to be the Companies dealing in B2B solutions including enterprise workflow automation, conversational analytics, and digital content creation.

In over funding of $ 51 million, 90% of the impetus went to three startups namely, Nutrix AI, Dashtoon, and Mihup while the major benefactor remains to be the early-stage startups. 

A Clear Shift 
The surge came with a shift in the choice of the investors. Investors are highly preferring application-based solutions rather than foundational models. Investors are inclining more toward the applications of Gen-AI in businesses enabling them to garner good returns through delivering tangible industry-specific solutions. The surge has been spearheaded by applications and services-based companies. 

Overall Scenario 
The funding rounds as well as the total funding received by the  Gen-AI startup industry saw a surge after consecutive declines. It hit an all-time high of 206 with total funding settling at $ 4 Billion. Interestingly, major funding went to startups developing applications and not LLMs. 

This indicates a Gen-AI market with a growing acceptance of AI-based applications or industry-specific solutions rather than foundational LLMs.

What about AI agents? 
Nasscom report underlines the growth in funding attracted by the AI agents industry reaching up to $1.3 billion across 53 deals, indicating growing investors’ interest in the domain of AI agents. 

Also Read: TCS Doubles Gen AI Pipeline as 2nd Quarter Concludes