HCLTech to Lead $300 Million Sarvam AI Funding Round at $1.5 Billion Valuation

HCLTech to Lead $300 Million Funding Round in Sarvam AI

Indian IT major HCLTech is poised to invest $150 million in Sarvam AI, a foundational models startup, as part of a $300 million funding round. The remaining $150 million will be contributed by a group of investors including Nvidia, Bessemer Venture Partners, Prosperity7, Activate, Glade Brook, and others. This significant investment values Sarvam AI at $1.5 billion post-money, a 7X increase from 2023.

The funding round, which is expected to close in the coming weeks, marks a rare instance of a legacy Indian IT services firm backing a homegrown AI startup. HCLTech's investment in Sarvam AI is a significant move, as India's large IT companies have faced criticism for being slow to adopt frontier technologies like AI. Instead, they have focused on buybacks and dividends over long-term R&D.

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Sarvam AI, which was founded in July 2023 by Vivek Raghavan and Pratyush Kumar, develops a full-stack offering for Generative AI, ranging from research-led innovations in training custom AI models to an enterprise-grade platform for authoring and deployment. The company has already made significant progress, launching two large language models (LLMs) with 30 billion and 105 billion parameters, both trained from scratch in India.

Sarvam's $300 million round is set to become the largest private market funding round for an Indian startup this year, while also marking the biggest capital infusion into a pure-play Indian AI startup to date. The company's interest in AI has been high since its Series A funding round in December 2023, led by Lightspeed Ventures with participation from Peak XV Partners and Khosla Ventures.

India's sovereign AI push has gained momentum, with initiatives like the IndiaAI Mission and BharatGen, a consortium led by IIT-Bombay, focusing on building homegrown alternatives to global AI systems dominated by Big Tech. Sarvam has emerged as a key player in this push, receiving Rs 99 crore ($11 million) in subsidies from the IndiaAI Mission for acquiring 4,096 NVIDIA H100 SXM GPUs.

The company's progress is a testament to the growing interest in AI in India, as domestic startups and national initiatives step up efforts to build homegrown alternatives to global AI systems.

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