Karnataka Leads India’s GenAI Startup Ecosystem

Karnataka has emerged as the undisputed hub of India’s generative artificial intelligence revolution, hosting 39 per cent of the country’s GenAI startups, according to the Economic Survey 2025–26. The milestone reflects the state’s deepening role in India’s fast-expanding technology startup ecosystem, now ranked the third-largest globally.

Sharp Rise in India’s GenAI Startups

The Economic Survey notes that India witnessed a threefold surge in GenAI startups, rising to 890 in the first half of 2025 from 240 in the same period of 2024. This rapid expansion highlights growing investor interest, increasing enterprise adoption, and strong domestic capabilities in advanced digital technologies. Karnataka’s share places it well ahead of other states in the GenAI landscape.

Strong Deep-Tech and Academic Foundations

Karnataka’s leadership is underpinned by a robust innovation ecosystem. The deep-tech sector recorded a 78 per cent increase in funding during calendar year 2024. The state also leads the country in higher education capacity, with 43 State Public Universities, providing a steady pipeline of skilled talent to support research-driven startups.

Shift Towards an AI Front Office

The survey highlights Karnataka’s role in India’s transition from a traditional “back-office” services model to becoming an “AI front office” for the world. While many regions remain technology adopters, Karnataka is increasingly positioned as a global innovator. This shift is supported by national initiatives such as the ₹1 lakh crore Research, Development and Innovation fund and the deep-tech Fund of Funds.

Important Facts for Exams

• Karnataka hosts 39% of India’s GenAI startups.
• India had 890 GenAI startups in H1 2025.
• The data is from the Economic Survey 2025–26.
• India’s startup ecosystem is the third-largest globally.

Growth Beyond Bengaluru and Strategic Goals

The GenAI and deep-tech momentum is extending beyond Bengaluru into tier-2 and tier-3 cities. The survey points to Karnataka’s role in India’s expanding space and advanced manufacturing sectors, with the national space economy projected to reach $44 billion by 2047. To sustain this edge, the survey stresses the need for “strategic indispensability,” where global firms rely on Indian supply chains, supported by predictable regulations, strong infrastructure and high-quality standards.