New Delhi

Investments in artificial intelligence (AI) and deep technology sectors are gaining significant traction in India, with AI’s share in venture capital (VC) funding rising to around 12 per cent from under 5 per cent in 2020, according to a report released by the India Deep Tech Alliance.

The report said AI startups emerged as the dominant investment theme in 2025, underscoring growing investor confidence in technology-driven innovation and practical applications across multiple industries.

In 2025, AI-focused companies secured 188 investments worth USD 1.2 billion, registering a 58 per cent year-on-year increase in funding value. The surge reflects expanding adoption of AI in areas such as enterprise software, healthcare, financial services, cybersecurity and industrial solutions.

“AI now accounts for about 12 per cent of total VC funding, up from under 5 per cent in 2020, representing substantial growth. More broadly, deep tech investment in India has reached critical mass,” the report noted.

According to the findings, nearly USD 28 billion has been invested in India’s deep tech ecosystem across more than 2,100 deals since 2016. Deep tech investments now constitute around 15 per cent of total private equity and venture capital activity, compared to just 4 per cent a decade ago.

The report highlighted that although overall venture capital activity moderated in 2025, with total investments remaining steady at approximately USD 10 billion, technology-led sectors significantly outperformed, indicating a shift in investor priorities.

This trend points to a broader transition from consumer-driven growth towards innovation anchored in science, engineering and intellectual property.

Beyond AI, the report noted increasing investment momentum in sectors such as space technologies, semiconductors, robotics, advanced manufacturing, medical technology, energy and climate solutions.

It also observed that early-stage deep tech investments have more than doubled over the past five years, signalling a strong pipeline of emerging technology companies and sustained investor interest.

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The India Deep Tech Alliance is an industry-led consortium of Indian and global investors focused on accelerating deep tech entrepreneurship and aligning innovation efforts with national priorities.