India’s first GenAI unicorn shifts to cloud services as AI model ambitions face reality

Source: TechCrunch

Krutrim, India’s first GenAI unicorn, is shifting from AI model development to cloud services after months of relative quiet on product updates—a move that reflects the tougher economics of building large‑scale AI systems.

Shift to Cloud Services

On Tuesday, Krutrim announced that it is moving toward cloud services. The shift follows a business overhaul in late 2025 that involved reallocating capital and talent and pausing chip‑design efforts. The update comes more than a year after the Bengaluru‑based startup released its Krutrim‑2 base model.

Recent Activity and Market Presence

• Krutrim has had limited public activity in recent months, with its last post on X dating back to December.
• The startup did not appear at the India AI Impact Summit in New Delhi, where global players such as Anthropic, Google, and OpenAI participated.
• Rival Sarvam showcased new open‑source models, hardware developments, and commercial partnerships at the same event.

Organizational Changes

• Krutrim has undergone multiple rounds of layoffs over the past year, cutting more than 200 roles according to local media reports.
• In April, the company pulled its Kruti AI assistant app from app stores.

Funding and Valuation

Founded by Bhavish Aggarwal—who also leads ride‑hailing firm Ola and EV maker Ola Electric—Krutrim raised $50 million at a $1 billion valuation in January 2024, reflecting early investor enthusiasm for India’s homegrown AI ambitions.

Financial Performance

• Revenue for FY 2026: ≈ ₹3 billion (≈ $31.5 million), a threefold increase from the previous year.
• The company reported its first annual net profit, with margins exceeding 10 %.
• Krutrim did not disclose the split between revenue from external customers and its parent Ola’s ecosystem. Earlier reports indicated that about 90 % of FY 25 revenue came from group companies.

Enterprise Cloud Demand

Krutrim says it is seeing growing demand for its AI cloud services, with more than 25 enterprise customers across telecom, financial services, and healthcare. Most of its GPU compute capacity is already committed to external workloads.

Analyst Perspective

“The move toward cloud was commercially sensible, but Krutrim’s profitability claims will need to be tested. The standard of proof must rise with the claim,”
— Sanchit Vir Gogia, chief analyst at Greyhound Research (as quoted to TechCrunch).

Competitive Landscape

While Krutrim pivots to cloud infrastructure, rivals such as Sarvam continue to release new AI models and sign partnerships, including a recent collaboration with space‑tech firm Pixxel to develop an AI‑driven orbital data center.

Outlook

Infrastructure may represent a more viable near‑term play in India’s AI market, even as the longer‑term ambition of building competitive models persists. Krutrim did not answer questions on its exact revenue mix, enterprise customer base, or recent restructuring.