AI Investments in 2025: What Investors Need to Know

In 2025, India is expected to become a leader in artificial intelligence (AI) investment and adoption. A recent study shows that about 80% of Indian companies consider AI a core strategic priority. It is higher than the global average of 75%.

Besides companies, the Indian government is also boosting the AI sector through its several key initiatives (like the IndiaAI mission) and higher budgetary allocations. As an investor, 2025 could be the best time to invest in AI-related stocks. 

In this article, let’s check out how India can position itself as a main player in the AI industry. 

The IndiaAI mission will boost the AI development

The Indian government is investing Rs. 10,000 crore in the India AI Mission. This mission provides researchers and startups access to AI technology and computing power. The goal is to provide adequate funding so that they can make innovations in AI.

Expanding AI computing power

A major part of this initiative is building a strong computing infrastructure. India has already set up a network of 18,000 high-end GPUs, with 10,000 available for AI development. 

These resources will be shared with universities, startups, and researchers so they don’t have to spend huge amounts on computing power. The government has set a timeline of 10 months for 100% implementation of this initiative.

Making AI accessible to all

AI development needs massive computing power. Normally, only big companies with deep pockets can afford it. However, through this mission, the government will ensure that AI resources are available to everyone at a lower cost. 

This will help even minor Indian institutions to create foundational AI models, which are the base for:

• Machine learning
• Generative AI
• Automation technologies

India to develop its own GPU and AI platform

Recently, Union Minister Ashwini Vaishnaw announced that India will develop its own Graphics Processing Unit (GPU) in the next three to five years. A domestic AI platform is also expected to be ready within 10 months.

How will India build its own GPU

The government is exploring three different approaches to creating India’s own GPU. Instead of starting from scratch, India will use:

• Open-source chipsets (freely available designs)
• Licensed chipsets (existing designs that can be modified).

By improving these chipsets, India aims to develop a fully Indian-made GPU. This is similar to how other countries have built their own. This will make India more self-reliant in AI computing and technology development.

Strong FDI inflows in India’s GenAI and Agentic AI segment

India’s Generative AI (GenAI) sector is growing due to increased investments in:

• Business-to-business (B2B) AI solutions 

and 

• Agentic AI start-ups

Foreign Direct Investment (FDI) is also flowing into India’s AI industry. Let’s understand in detail:

Funding received in Agentic AI

Agentic AI refers to smart AI programs that can work independently. These programs can make decisions and solve problems without human instruction. This technology is attracting huge investments. 

Since 2023, Agentic AI has received $1.3 billion (Rs. 11,269 crore) in funding across 53 deals. Tech giants (like Google, Amazon, and Microsoft) are integrating AI agent code into their products. 

Growth in generative AI start-ups

Indian GenAI start-ups raised $51 million (Rs. 441 crore) in the first half of FY24-25. Investors are now focusing more on AI applications rather than just building foundation models. 

Over 90% of recent GenAI funding went to three major start-ups:

• Nutrix AI
• Dashtoon
• Mihup

Investors believe that GenAI can transform businesses. This confidence is attracting more investments into Indian AI start-ups.

Increasing AI adoption in India

India’s AI market is expected to reach $8 billion (Rs. 69,630 crores) by 2025. It is currently growing at an impressive 40% CAGR (Compound Annual Growth Rate). Such a rapid expansion creates huge opportunities for foreign companies to:

• Collaborate with Indian firms 

and 

• Use AI technology to develop new solutions

Moreover, the Indian government is promoting AI adoption through initiatives like the National AI Strategy and the National AI Portal. These projects are helping businesses to integrate AI into their operations. 

In the future, it is expected that AI will be widely used in industries like healthcare, banks, NBFCs, retail, and agriculture. 

Conclusion

India’s AI sector is witnessing strong growth. It is mainly due to:

• Strong government initiatives
• Rising corporate adoption
• Increasing foreign investments

With $8 billion (Rs. 69,630 crores) in projected market value by 2025 and a 40% CAGR, India is set to become a key global AI hub. The IndiaAI Mission and domestic GPU development are expected to enhance AI accessibility. These initiatives will provide funding to startups so that they can innovate without financial constraints.

Also, investments in GenAI and Agentic AI are surging. These segments are getting major funding from global tech giants. Due to advancements in AI technologies, various sectors are expected to benefit, such as healthcare, online marketplaces, manufacturing, and retail. In these industries, AI will lead to automation and improve customer experience.