As artificial intelligence continues to scale globally, investment momentum is rapidly accelerating, signalling a shift from early experimentation to large-scale commercial deployment. A new report highlights how capital is now flowing into real-world AI use cases, with India emerging as a key player in this evolving landscape.
Global AI investment reached $800 billion in 2025, with venture capital funding nearly doubling to $226 billion. The report notes that 79% of this capital was concentrated in large deals exceeding $100 million, indicating strong investor confidence backed by clear enterprise demand.
“AI today is first and foremost a gold rush. Capital of every stripe — venture capital, private equity, debt and balance sheets — is converging at unprecedented scale,” said Rahul Agarwalla, managing partner, SenseAI Ventures. He added that AI is now becoming an economic necessity rather than just a technology trend.
The focus of value creation is also shifting. Instead of model-building and infrastructure, companies are now prioritising deployment. AI is increasingly being embedded into products, workflows, and revenue-generating operations, making the application layer the main driver of commercial impact.
India is playing a significant role in this transition. The report, based on 1,263 Indian AI startups, shows that 75% are focused on application-based solutions, while nearly 80% of funding is directed toward this segment. Many of these startups are also reaching revenue stages early.
“This is not a capability gap; it is a strategic position aligned with India’s comparative advantage and where the fastest commercial outcomes in AI are emerging,” the report said.
Key trends shaping the sector include capital concentration in fewer but larger deals, faster scaling of AI-native companies with lean teams, rising infrastructure investments, and expansion into sectors such as defence, research, and automation. The report also highlights increasing competition for talent and a shift towards more advanced reasoning systems.
“The advantage in AI is shifting from those who build the most powerful models to those who deploy them effectively at scale,” said Raja Gopalakrishnan, general partner, SenseAI Ventures.
Additional insights show AI funding in India grew 277%, average deal size increased 2.6x, and enterprise AI contract values rose from $39,000 to $530,000 in 2 years.
As access costs fall and capabilities improve, the next wave of AI leaders will be defined by their ability to deliver real-world impact at scale.
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