Bengaluru Still Leads, but India’s AI Momentum Is Broadening Across Cities

News

1. Novo Moves Delhi High Court Against Dr Reddy’s Over Olymviq Brand

2. Google Pushes Deeper into AI Music with Lyria 3

3. OpenAI Foundation to Deploy $1 Billion on AI Risks, Health and Jobs

4. Delhi Budget Charts Expansion in Semiconductors, Drones and AI

5. OpenAI Shuts Down Sora, Ends $1 Billion Disney Partnership

6. Half of India’s GCC Work at Risk Amid Shift Up Value Chain

Bengaluru continues to anchor India’s AI startup ecosystem, reinforcing its lead as the country’s primary hub for AI-native ventures. Data from Tracxn shows the city remains dominant in venture creation, even as funding dynamics evolve and rival hubs gain ground. 

However, this is still not the final word. Many cities are striving not only to lead but to establish their reputation in AI innovation. Factors such as policy, talent, infrastructure, and others significantly influence how these cities are ranked.

Bengaluru’s dominance is rooted in both scale and consistency. The number of AI startups in the city rose from 38 in 2020 to a peak of 124 in 2024, reflecting sustained growth alongside a broader surge in interest in generative AI technologies. 

Although the number of startups dropped to 49 in 2025 and 2026, data is still coming in; Bengaluru’s overall base remains significantly higher than any other city in India. The ecosystem has matured into a strong, self-sustaining network of founders, talent, and institutions,  so a slower pace of new startups won’t have a big impact.

Looking at funding trends in Bengaluru, Tracxn revealed that investments surged from $87.4 million in 2020 to an impressive $505.5 million in 2022, reflecting peak investor enthusiasm for AI. Since then, funding has gradually narrowed, falling to $291.9 million in 2023, $279.3 million in 2024, and $253.4 million in 2025. 

Early 2026 indicates continued caution, with only $46.5 million raised across eight rounds so far. This decline might seem like a loss of confidence, but deal activity has stayed relatively steady, implying that investors are still supporting startups with smaller investments and more careful evaluations. 

For founders like Ankush Sabharwal of CoRover, the city’s advantage lies beyond funding cycles. “Building an AI startup in Bengaluru offers a uniquely enabling environment where access to experienced entrepreneurs, potential co-founders, forward-looking investors, and highly skilled tech talent comes together seamlessly,” he says.

Sabharwal also points to policy support as a differentiator. Government support, particularly through initiatives such as Karnataka’s Elevate program, has also played a critical role in helping startups scale during their early stages. 

Bengaluru’s collaborative culture, he suggests, not only accelerates innovation but also builds the resilience required to navigate the inevitable cycles of hype and correction that define emerging technologies.

What About New Delhi?

Delhi-NCR seems like a tale of promise tempered by volatility. The number of AI startups grew from 14 in 2020 to 78 in 2024, then dropped to 38 in 2025. While the pattern is similar to Bengaluru’s, Delhi-NCR works on a smaller scale and has less steady funding. 

Investments in Delhi-NCR have swung widely,  jumping to $518.4 million in 2021 before crashing to $39.5 million in 2022. Subsequent years saw some recovery, with $47.3 million in 2023, $84.5 million in 2024, and $240.8 million in 2025. But 2026 has started slowly, with just $2 million raised so far.

Despite these shifts, the region is carving out a distinct identity within India’s AI landscape. 

Apurv Agrawal, co-founder of SquadStack, highlights that its key strength is in applied AI. “The region has a robust pool of applied AI engineers, data practitioners, and operators who grasp real customer journeys at scale,” he states.

Startups in the region are particularly adept at handling multilingual environments, high-volume workflows, and real-world customer interactions. Companies such as Awiros and SalesCode.ai exemplify this approach, focusing on practical deployment rather than purely technological innovation. 

AI Dreams of Mumbai

Mumbai has a different story overall—one defined by irregular but significant capital inflows. The city’s AI startup ecosystem has grown modestly, with company formation rising from just 6 in 2020 to 29 in 2024, then dipping to 18 in 2025. 

Mumbai’s ecosystem appears more concentrated, unlike Bengaluru’s broad growth. Its funding shows sharp spikes rather than steady progression. After low investments early on, funding jumped to $116.6 million in 2022, dipped in 2023, then rose again to $131.8 million in 2024, before falling in 2025.

What sets Mumbai apart is its dramatic start to 2026. In three funding rounds, AI startups there have raised $601.1 million, beating the total raised in many past years.

Babblebots AI and LearnTube.ai are among the AI startups in this growing landscape, but the city’s identity remains closely tied to its financial ecosystem. 

Everything AI at Hyderabad

Hyderabad has been growing steadily alongside Bengaluru as an emerging AI hub. The number of startups rose from 8 in 2020 to 30 in 2024, then dipped slightly to 22 in 2025. Though the numbers are modest, they reflect a consistent upward trajectory. Funding trends in Hyderabad show slow progress, punctuated by occasional spikes. 

After minimal investment in the early years, funding rose steadily, reaching $61.8 million in 2024. Although it dropped to $15 million in 2025 and has remained subdued in early 2026, the overall trend indicates growing investor interest.

Hyderabad’s appeal lies in its balance of affordability, infrastructure, and policy support. Startups such as Skyroot Aerospace, Landeed, and Equal AI demonstrate the diversity of innovation emerging from the city. 

Another Maha AI City

On the other hand, Pune is the smallest and most nascent ecosystem. Startup numbers have been inconsistent, going from 5 in 2020 up to 18 in 2024, then dropping sharply back to 5 in 2025. Funding has also seen occasional spikes followed by big drops.

Although startups like Lentra and Intangles highlight the city’s potential, Pune has yet to achieve the scale or consistency required to compete with larger hubs. 

Why Bengaluru Leads

As of now, Bengaluru continues to lead the Indian AI startup race due to a deep talent pool, strong institutional backing, and a consistent startup ecosystem.  However, the narrative is changing with leadership. Now, investors seem to prioritize sustainability and real impact over the AI buzz or hype.

At the same time, other cities are not merely catching up; they are looking for ways to stand out. Delhi-NCR is becoming synonymous with execution-driven AI, Mumbai with large-scale funding deals, and Hyderabad with steady, policy-backed growth. Even smaller ecosystems like Pune are beginning to contribute to the broader narrative, though at an early stage.

So, the race isn’t about who wins anymore. It’s about how different ecosystems grow together to secure India’s place in the global AI landscape.