Sarvam AI
NEW DELHI: The Indian government is expected to secure a minority equity stake in AI startup Sarvam as part of the company’s ongoing $300 million funding round.
The stake, estimated at 1-2%, arises from compute infrastructure support extended under the IndiaAI Mission and will be realised through the conversion of compulsorily convertible debentures (CCDs) into equity.
Non-Cash Support Converted into Equity
This development stems from compute infrastructure provided to Sarvam under the IndiaAI Mission. In exchange for subsidised access to high-performance GPUs, the government received compulsorily convertible debentures (CCDs), which are expected to convert into equity during the current fundraising cycle.
A government official explained the rationale: “The Centre will be taking a small stake in Sarvam. The support provided to companies under the IndiaAI Mission needs to be accounted for in some form, if not cash.”
This approach represents a shift from purely grant-based assistance to a model that allows the government to gain a modest ownership stake while supporting indigenous AI development.
Sarvam’s Recent Funding Momentum
Sarvam has already secured $234 million in the first tranche of its funding round, led by HCLTech with a $150 million investment that gives the IT services major approximately a 10% stake. The startup is currently valued at around $1.5 billion.
Other participants include Bessemer Venture Partners, Khosla Ventures, and Peak XV Partners. The company is expected to raise the remaining capital to complete the $300 million round.
Founded in 2023 by Vivek Raghavan and Pratyush Kumar, Sarvam focuses on building sovereign AI models tailored to Indian languages and use cases.
Sarvam reported revenue of ₹45.1 crore in FY26, up from ₹1.5 crore in FY25.
The startup has been one of the key beneficiaries under the IndiaAI Mission, receiving the largest compute subsidy allocation of ₹98.68 crore against a total compute bill of ₹246.71 crore for access to 4,096 Nvidia H100 GPUs over six months.
IndiaAI Mission
The IndiaAI Mission aims to reduce dependence on foreign AI models by fostering domestic capabilities in foundational models, compute infrastructure, and talent development.
Sarvam is among a select group of companies chosen to develop multilingual and domain-specific large language models. The government covers up to 40% of compute costs for selected participants.
Some startups had earlier raised concerns about equity-linked support, preferring grant-based mechanisms. However, the current arrangement reflects the government’s intent to create a more accountable and sustainable model of public-private collaboration in frontier technologies.
Analysts note that this equity arrangement could establish a framework for future public-private engagements under the IndiaAI Mission. By converting infrastructure subsidies into minority equity rather than providing outright cash grants, the mechanism allows the Centre to account for public resources while ensuring startups retain operational control.
For Sarvam, the partnership provides critical compute resources essential for training large models while maintaining operational independence.
The move also comes at a time when global supply chain restrictions and export controls on advanced AI technologies have underscored the need for sovereign capabilities.
Sarvam has positioned itself as a key player in building India-first AI infrastructure, recently open-sourcing models such as Sarvam-30B and Sarvam-105B that support 22 Indian languages.
This development occurs amid Sarvam’s continued growth and the broader push for technological self-reliance in artificial intelligence.
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