HCLTech bets $150M on Sarvam AI
What's the story
HCLTech is set to lead a $300 million (approximately ₹2,850 crore) funding round in Sarvam AI, an Indian company specializing in foundational models. The tech giant will invest around $150 million (₹1,450 crore) while Bessemer Venture Partners will contribute another $50 million as part of the deal, reported Moneycontrol. The remaining amount will be jointly invested by NVIDIA, Prosperity7, Activate and Glade Brook, among others.
Valuation boost
Deal to close in coming weeks
The funding round will value Sarvam AI at $1.5 billion (₹14,250 crore) post-money, a seven times increase from 2023. The deal is expected to close in the coming weeks and has already drawn interest from existing investors such as Khosla Ventures, Lightspeed, and Peak XV Partners who are all expected to participate on a pro-rata basis.
Strategic move
Traditional IT firm investing in AI start-up
If finalized, this deal would be a major shift as a traditional Indian IT services firm is investing in a homegrown AI start-up. The move comes amid fears that advancements in AI models by companies like Anthropic could disrupt large parts of the traditional outsourcing business. Investors have been questioning whether Indian IT firms are adapting quickly enough to automation reshaping software development and back-office services.
Record-breaking
Largest private market funding round in India this year
Sarvam AI's $300 million funding round will be the largest private market funding round for an Indian start-up this year. It will also be the biggest investment in a pure-play Indian AI start-up so far. This is Sarvam's first major cash infusion in over two years, having last raised $41 million in its Series A funding round back in December 2023.
Technological advancements
Sarvam AI's recent developments and offerings
Sarvam launched two large language models (LLMs) earlier this year, a 30-billion-parameter model and a 105-billion-parameter one, both trained in India. The company has also become a key player in India's sovereign artificial intelligence (AI) mission. Founded in July 2023 by Vivek Raghavan and Pratyush Kumar, Sarvam offers a complete solution for Generative AI including research-led innovations to train custom AI models as well as an enterprise-grade platform for authoring/deployment.