The central government may acquire a 1–2% stake in AI startup Sarvam after the company completes its ongoing $300 million funding round, ET reported. The proposed stake is linked to compute infrastructure provided under the IndiaAI Mission in exchange for compulsorily convertible debentures (CCDs), which are expected to convert into equity.
The Centre may soon become a minority shareholder in Bengaluru-based AI startup Sarvam through its support under the IndiaAI Mission.
According to ET, the government provided compute infrastructure to Sarvam under the programme and, instead of taking cash, received compulsorily convertible debentures (CCDs). These are expected to convert into equity after the startup closes its ongoing $300 million funding round, giving the government a reported 1–2% stake.
“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,” an anonymous government official was quoted as saying.
Sarvam and the Ministry of Electronics and Information Technology (MeitY) did not respond to queries before the report was published.
Earlier this month, Sarvam raised $234 million as part of its larger $300 million funding round. HCLTech led the investment with $150 million for a 10.46% stake, while Bessemer Venture Partners, Khosla Ventures and Peak XV Partners also participated.
The funding valued Sarvam at $1.5 billion, making it India’s 130th unicorn. Based on this valuation, the government’s reported stake could be worth between $1.5 million and $3 million.
Sarvam is one of the AI startups selected under the IndiaAI Mission to build indigenous, multilingual and domain-specific foundation models. Other selected organisations include Soket AI Labs, Gnani.ai, Gan.AI, BharatGen, Tech Mahindra, Fractal Analytics, Avataar.ai, ZenteiQ Aitech Innovations, Genloop Intelligence, NeuroDx and Shodh AI.
Under the programme, the government covers 40% of GPU compute costs for selected startups. Sarvam received one of the largest allocations, with ₹98.68 crore in government support against a total compute bill of ₹246.71 crore. The allocation provides access to 4,096 Nvidia H100 GPUs for six months.
The IndiaAI Mission aims to strengthen India’s AI ecosystem by supporting homegrown AI developers and improving access to expensive compute infrastructure.
The government’s decision to provide support in return for a place on startups’ cap tables has raised concerns among some founders. ET reported in January that several startups preferred a grant-based approach, saying it would support indigenous AI development without diluting ownership.
Founded in 2023 by Pratyush Kumar and Vivek Raghavan, Sarvam develops AI models, infrastructure and enterprise products across language, speech, vision and document AI. Its customers include organisations in banking, insurance, government and defence.
According to unaudited financials shared by HCLTech, Sarvam reported FY26 revenue of ₹45.1 crore, up from ₹1.5 crore in FY25. HCLTech’s investment is the largest made by an IT company in the Indian AI startup ecosystem.
The fresh capital will support Sarvam’s research on its next-generation frontier models, particularly for agentic AI, coding and cybersecurity. Part of the funding has also been earmarked to secure large-scale compute infrastructure as the company expands deployments across enterprises and government organisations.
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