India's AI investment paradox: Nearly half of institutional investors see artificial intelligence as the nation's most promising frontier tech opportunity, yet only 7% are willing to pay current premium valuations for AI startups. A recent survey of 70 institutional investors reveals a sharp disconnect between enthusiasm and capital deployment. While the Indian AI ecosystem is projected to reach $130 billion by 2030, over 56% of investors believe India lags China by at least 3-5 years. Recent high-profile failures including Flipkart-backed NeuroPixel AI and several other AI-native startups have triggered a significant shift in investor sentiment. About 92% now take selective approaches to AI investments, with roughly 43% either avoiding inflated deals or demanding clearer unit economics before committing.
