Researchers at AI4Bharat, a start-up backed by Microsoft, are raising $12 million from venture capital firms Peak XV and Lightspeed Venture, according to three people familiar with the matter.
After OpenAI’s ChatGPT amazed users with its ability for human-like conversation, a larger-than-usual seed funding round is evidence of the growing interest in generative AI. Most seed rounds are up to $1 million to $2 million.
The Indian government has also supported AI4Bharat, which has been developing AI models for speech recognition and translation. In May, it launched a mobile assistant to provide information on government schemes in various languages.
Incubated at the Indian Institute of Technology in Madras and supported by a grant from Infosys co-founder Nandan Nilekani, AI4Bharat is also working with payments agency National Payments Corp of India to develop systems for voice-based payments on feature phones.
The investment is among the first made by Peak XV Partners, rebranded from Sequoia Capital India and SEA last month after splitting from its American parent fund.
According to the company’s website, Peak XV’s other AI investments are the voice assistant firm AI Rudder, the computer vision firm Mad Street Den, and the enterprise marketing platform Insider.
An uncertain economy has discouraged investments for other companies, but the buzz around generative AI among consumers and businesses has helped related start-ups draw funding. As of June, data from Venture Intelligence shows that Indian AI start-ups had raised $583 million this year. Their total funding last year was $2.45 billion.
