Investments in Artificial Intelligence (AI) and deep technology sectors are witnessing strong momentum in India, with AI’s share in Venture Capital (VC) funding increasing to around 12 per cent from less than 5 per cent in 2020, according to a report by the India Deep Tech Alliance.
The report identifies AI startups as the standout theme of 2025, reflecting growing investor confidence in technology-driven innovation and real-world applications across multiple sectors.
In 2025 alone, AI companies secured 188 investments worth $1.2 billion, marking a 58 per cent year-on-year increase in funding value. The report attributes this surge to the rising adoption of AI across enterprise software, healthcare, financial services, cybersecurity, and industrial applications.
It stated that “AI now accounts for about 12 per cent of total VC funding, up from under 5 per cent in 2020, representing significant growth. Looking more broadly, deep tech investment has reached critical mass.”
The report further highlighted that deep tech investment in India has steadily reached critical mass over the years. Since 2016, nearly $28 billion has been invested across more than 2,100 deep tech deals.
Deep tech now accounts for approximately 15 per cent of total private equity and venture capital activity, compared to just 4 per cent a decade ago. Although overall venture capital activity moderated in 2025, investment momentum remained strong in technology-led sectors. Total VC investment in India stood at about $10 billion in 2025. However, within that total, AI and deep tech sectors significantly outperformed, indicating a clear shift in investor priorities.
The report notes that this trend signals a fundamental transition from consumer-led growth to innovation driven by science, engineering, and intellectual property. It also highlights increasing diversification within the deep tech sector. While AI continues to lead, substantial momentum is also evident in space technologies, semiconductors, robotics, advanced manufacturing, medtech, as well as energy and climate technologies.
Encouragingly, early-stage deep tech investments have more than doubled over the past five years, pointing to a growing pipeline of future technology leaders and sustained investor confidence in innovation-focused sectors.
The India Deep Tech Alliance is an industry-led consortium of leading Indian and global investors formed to accelerate deep-tech entrepreneurship in India and align with national innovation priorities.
