India’s Generative Artificial Intelligence (GenAI) ecosystem is expanding at record speed, and Karnataka has emerged as its undisputed leader. According to the Economic Survey 2025-26, the state hosts nearly 39% of India’s GenAI startups, underlining its role as the country’s deep-tech powerhouse and a global innovation hub.
India’s Exploding GenAI Startup Ecosystem
- India’s technology startup ecosystem is now the third-largest globally, and GenAI is its fastest-growing segment.
- In just one year, the number of GenAI startups jumped sharply, reflecting rising demand for AI-driven solutions across healthcare, finance, manufacturing, defence, and consumer services.
- According to Tracxn data, GenAI startups attracted $76.4 million in funding year-to-date, spread across 18 funding rounds, highlighting growing investor confidence despite global funding volatility.
Why Karnataka Leads India’s GenAI Revolution
- Karnataka’s dominance is driven by a unique combination of talent, infrastructure, and policy support.
- The state leads India in deep-tech concentration, supported by a strong academic base with 43 State Public Universities, the highest in the country.
- This ensures a continuous pipeline of skilled engineers, researchers, and AI professionals.
- Bengaluru, in particular, provides dense networks of startups, global tech firms, venture capital, and research institutions, making innovation faster and more scalable.
From Back-Office to ‘AI Front Office’
- The Survey highlights a strategic shift in India’s technology journey from being a global back-office services provider to becoming an AI front office for the world.
- While many regions remain technology adopters, Karnataka is transitioning into a global AI innovator, building core AI products, foundational models, and advanced applications rather than just implementing imported technologies.
Funding Push & National Deep-Tech Support
- This transformation is supported by strong national backing.
- India is leveraging the ₹1 lakh crore Research, Development and Innovation (RDI) initiative, including a dedicated Deep-Tech Fund of Funds, to finance cutting-edge research in AI, semiconductors, space, and advanced manufacturing.
- This complements the existing startup fund of funds framework, strengthening India’s position in global technology value chains.
Growth Beyond Bengaluru
- The GenAI and deep-tech surge is no longer confined to Bengaluru alone.
- The Economic Survey notes increasing spillover into tier-2 and tier-3 cities of Karnataka.
- Regions like Belagavi are emerging as aerospace and advanced manufacturing hubs.
- This decentralisation helps spread innovation, employment, and industrial growth more evenly across the state.
Key Summary at a Glance
| Aspect | Details |
| Why in News? | Karnataka hosts 39% of India’s GenAI startups |
| Source | Economic Survey 2025-26 |
| Growth | Threefold rise from H1 2024 |
| Key Hub | Bengaluru |
| Policy Support | ₹1 lakh crore RDI initiative |
Question
Q. According to Economic Survey 2025-26, which state hosts the highest share of GenAI startups in India?
A. Maharashtra
B. Tamil Nadu
C. Telangana
D. Karnataka
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