The Race to Give AI Models Infinite Memory

After improving LLMs’ reasoning skills, the next frontier for AI researchers is to give them infinite memory.

Today, users around the world have gradually woven AI into their daily lives, both personal and professional. To truly make AI indispensable, a memory boost could be crucial, allowing systems to retain what matters without being prompted repeatedly.

OpenAI CEO Sam Altman, in a December podcast appearance, said that memory will have far more impact on language models than reasoning. He suggested that once AI can remember a person’s entire history and subtle preferences and not just explicit facts, it will become deeply personalised and far more powerful.

Today, Context Window acts like short-term working memory, but LLMs still lack true long-term recall, and the transformer architectures behind them struggle to reliably handle very long input sequences.

In an exclusive conversation with AIM, IISc professor Jayant Haritsa said that LLMs with a large context window cannot replace database systems. “You cannot substitute database guarantees with LLMs,” he said. However, Haritsa added that LLMs can play a supporting role by helping optimise database systems.

Building something close to infinite memory will require fresh innovation from database companies. Haritsa noted that modern databases are increasingly being built to handle much larger amounts of memory.

“We already have almost infinite memory because main memory is so cheap now,” Haritsa said. That shift, he explained, has quietly driven one of the biggest changes in modern database architecture.

He shared that traditional databases were built as row stores, where one row of data was written after another, and each row contained all the fields of a record. This design worked well when storage access was slow and memory was limited.

Haritsa said modern systems, however, increasingly use columnar storage. Instead of storing full rows together, each column is stored separately, often in its own file.

He explained that the content is currently stored in a columnar format, meaning a separate file exists for each column in a database. Although the actual content remains identical, the architecture and resulting performance differ significantly.

When people say LLMs have infinite memory, they are not referring to the model itself remembering everything. The memory actually lives outside the model, in fast main memory that stores conversation history, documents, and vector embeddings.

Because modern systems can keep enormous amounts of data in RAM and retrieve it in milliseconds, relevant context can be pulled in and fed back to the model on demand. “With large memories, you can now build large columnar databases,” Haritsa said. “You can build many more B-tree indexes on essentially the entire database. So search, and everything becomes much faster.”

In older systems, indexing every field was impractical because indexes consumed precious space and slowed down writes. Today, memory abundance flips that trade-off. The result is systems optimised for fast reads, complex filters, and real-time analytics at scale.

Haritsa added that this same shift has coincided with the rise of vector databases, which store high-dimensional embeddings used by modern AI systems.

As embeddings and unstructured data become central to how AI models retrieve and reason over information, database architecture itself is emerging as a key differentiator.

That change is now shaping how database vendors position themselves for the AI era. Benjamin Cefalo, senior vice president and head of core products and Atlas Foundational Services at MongoDB, told AIM that the company’s edge lies in its design choice.

He said MongoDB was built around JSON documents rather than rows and columns, a distinction that matters because modern AI systems, particularly retrieval-augmented generation (RAG) and agentic applications, primarily work with semi-structured and unstructured data such as text, logs, documents, user activity, and embeddings.

Instead of forcing this data into relational tables, MongoDB stores it natively as documents. According to Cefalo, this makes the database a more natural foundation for AI workloads, rather than a system retrofitted to accommodate them.

Research Towards Infinite Memory

Significant research is underway to improve LLMs’ memory, spanning major tech companies, research labs, and independent researchers. Google Research recently introduced two advances, Titans and the MIRAS framework, to address the bottleneck in long-term memory.

Traditional Transformer models struggle with very long inputs because their attention systems become expensive as text grows longer. In contrast, recurrent models try to squeeze information into a fixed-size memory, often losing important details in the process.

To address this, Google’s approach combines the efficiency of recurrent models with the precision of Transformers. Titans is a new neural architecture that adds a dedicated long-term memory module capable of actively learning and updating information as data streams in, rather than relying solely on short-term attention or static memory vectors.

Under the hood, Titans is built on the MIRAS framework, which treats sequence modelling as a process of continuously updating and using memory, rather than processing information in one fixed pass. Instead of compressing history into a static state, MIRAS treats memory, attention bias, retention, and update mechanisms as unified components that can adapt as the model processes input.

Besides this, Google also introduced a new framework called Nested Learning (NL), which reframes how neural networks store information, learn from data and adapt over time. They claim this approach may explain why current AI systems hit limits and how future models could move beyond them.

Together, these advances go beyond simple context windows, allowing AI systems to learn and retain information as they are used, without needing separate retraining later.

Other Notable Research

20-year-old Dhravya Shah’s startup, Supermemory, is also working on providing more context toAI tools.

Supermemory is designed as a universal memory layer for AI applications. The product takes unstructured data such as files, chats, emails, project updates, and PDFs, and converts it into a personalised knowledge graph for users across AI tools such as ChatGPT, Gemini, and Claude. These apps can then recall this memory to connect relevant information across time and platforms.

Meanwhile, researchers from China and Hong Kong have introduced General Agentic Memory (GAM). This dual-agent memory system keeps a complete record of history and recalls only the parts needed, helping models retain long conversations without over-compressing context.

The Problem That Memory Cannot Solve

Despite these advances, Haritsa was careful to draw a rigid boundary around what abundant memory can and cannot fix.

“The fundamental problems of giving guarantees will not change,” he said. Enterprise and mission-critical systems still demand strict correctness, durability, and consistency. While large memory may make some problems easier, it does not remove the need to prove correctness.

According to Haritsa, the hardest part is still proving that these systems can be trusted in mission-critical and enterprise environments. That problem, he said, needs to be addressed from first principles.

In other words, infinite memory does not mean infinite trust. Where things get interesting, Haritsa argued, is at the boundary between classical databases and AI-driven systems.

Because of machine learning and LLMs, a new category of applications is emerging that does not require exact answers. “In many applications, it may not be necessary to give precise answers. An approximate answer may be okay,” he said.

This tolerance opens the door to probabilistic techniques that trade precision for speed, something traditional databases were never designed to do.

Where Precision Is Non-Negotiable

However, approximation has strict limits. “There are many applications in database systems like income tax filing, where it cannot be approximate,” Haritsa said. “They expect it to be correct.”

In these domains, traditional database techniques are still indispensable, as strong guarantees, precise answers, and deterministic behaviour are required by law and financial regulation.

“So when absolute precision is required,” Haritsa said, “all the old database technology is still required.”

In his view, databases and AI systems will coexist rather than replace each other. Databases will prioritise accuracy and trust, while AI systems will be more comfortable dealing with uncertainty.

Infinite memory will change how AI systems are built. But it does not remove the need for reliability. As Haritsa points out, databases and AI are evolving in parallel rather than replacing each other. Memory may expand what AI can do, but guarantees will continue to define where it can be trusted.

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Indian IT Expected to Deliver Subdued Growth in Q3 as Furloughs Bite

Indian IT services companies are expected to report a moderate performance in the December quarter—traditionally a seasonally weak period due to furloughs—with demand remaining stable but largely driven by cost optimisation rather than discretionary technology spending, according to brokerage firms and analysts.
Kotak Institutional Equities said in a note it expects “a moderate performance in a seasonally weak period for IT services companies,” adding that demand over the past few quarters has remained “broadly on expected lines with furloughs at normal levels.”

The brokerage noted that growth in the quarter is likely to be uneven across companies, with tier-1 firms posting low single-digit sequential growth and some reporting flat or marginally negative trends, while pure-play BPO companies are expected to deliver stronger outcomes.
Analysts at JM Financial echoed this view, stating that “3QFY26 is a seasonally soft quarter given furloughs,” with the impact similar to last year and “no change in the demand environment versus the start of the quarter.” The brokerage added that deals continue to be “largely cost efficiency/cost takeout in nature and there is no pick up in discretionary spend.”

In a conversation with AIM, UnearthInsight CEO Gaurav Vasu said the December quarter is expected to see subdued growth, estimating sequential constant-currency revenue growth of 0.6–1.2% for the sector.
He said the impact of furloughs, fewer working days and cautious discretionary spending would weigh on growth, with demand conditions “largely unchanged from the previous quarter.” According to him, revenue momentum during the quarter is expected to be driven mainly by existing deal ramp-ups, while new client decision-making remains limited.

Revenues

On revenue growth, Kotak Bank said it expects organic constant-currency sequential growth for large IT firms such as TCS, Wipro and Tech Mahindra to be in the range of 0.3–0.9%, while Infosys is expected to see a marginal sequential decline due to seasonality.
HCL Technologies is expected to outperform peers, aided by its product portfolio, while mid-tier companies such as Persistent Systems and Coforge are expected to continue leading growth within their cohort.
JM Financial estimates constant-currency revenue growth of 0.2–2.5% quarter-on-quarter for the top six IT companies, and a wider range of outcomes for mid-tier firms, led by Persistent.
The brokerage also highlighted that the banking, financial services, and insurance (BFSI) vertical remains relatively resilient compared with other sectors, while manufacturing, particularly automotive, “continues to be relatively challenged” in the quarter.
Vasu similarly noted that BFSI and healthcare are likely to be relative growth drivers, while manufacturing, telecom and automotive may continue to lag, with Europe and APAC showing better momentum compared with a softer US market.

Margins

Margins are expected to remain largely rangebound across the sector. Kotak said EBIT margins, measuring core profitability as a percentage of revenue, are likely to stay stable for most companies, “partly aided by rupee depreciation,” even as wage hikes and limited incremental margin levers constrain profitability.
The brokerage cautioned that wage increases could impact margins by 30–100 basis points at some firms, while noting that it has not factored in any impact from potential provisions under India’s new labour codes, effective November 2025.
JM Financial similarly pointed out that a 1.4% sequential depreciation in the rupee is likely to provide margin support, though this would be “partly offset by lower growth given seasonally soft quarter and wage hikes (in certain cases).”
Vasu said EBIT margins at the industry level are expected to remain in the 15–16% range, with pressure from furlough-led utilisation softness and wage hikes partly offset by cost optimisation efforts and favourable cross-currency movements.
Both brokerages flagged deal activity as an area of relative strength, even as near-term revenue conversion remains gradual. Kotak said deal wins are expected to improve, “aided by large and mega-deal wins,” while stressing that demand continues to be driven by vendor consolidation rather than net-new spending.
JM Financial noted that Infosys is expected to report a sharp increase in large deal total contract value during the quarter, while adding that the key focus will remain on deal conversion rather than headline bookings.
Vasu said management commentary on CY26 client budgets, deal pipelines and AI-led opportunities will be closely watched.
Looking beyond the quarter, Kotak said the setup for FY27 is “interesting,” as stabilisation in certain verticals and broader adoption of established generative AI use cases could drive a 100–200 basis point acceleration in revenue growth across larger companies, even if discretionary spending remains muted.
JM Financial, however, remained cautious on valuations and competitive intensity, noting that while Indian IT stocks have underperformed the broader market, pricing still reflects expectations of a recovery that is yet to materialise fully.

Dhanshree Jadhav, analyst of technology at Choice Institutional Equities, said most IT services companies are expected to deliver resilient growth and margins in Q3 FY26 despite seasonal furloughs, supported by vendor consolidation, large deal ramp-ups, and AI-led enterprise modernisation.
She noted that while discretionary spending recovery may take longer, a weaker rupee is likely to support reported revenues and margins in rupee terms, even as cross-currency movements could modestly weigh on dollar growth. Jadhav added that valuations across the sector have turned more favourable, with large-cap stocks trading near long-term averages and mid-tier names well below prior peaks.

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Why Deep tech Startups Fail in the Middle, Not in the Lab

Can India Make a Dent in the $2 Trillion Global Chip Market?Can India Make a Dent in the $2 Trillion Global Chip Market?

Deep technologies rarely fail because of science. Nor do they fail for lack of investor appetite. Most stall in the critical middle stages—after feasibility is established, but before a product can be deployed reliably.

This gap, where technology works in controlled environments but struggles outside them, has long been described as the ‘Valley of Death’. In deep tech, it most often appears between Technology Readiness Levels (TRLs) 4 and 7, when startups move from proof-of-concept to pilots, and from research to commercial reality.

Devised by NASA, TRLs measure a technology’s maturity from basic research to full operational deployment on a 1-to-9 scale.

Interviews with incubator leaders, investors, and founders point to a consistent pattern: public funding underwrites early research, private capital prefers later-stage deployment, and near-real-world operation remains the most exposed.

How Risk Changes Across TRLs

In 2025, more than half of deep tech funding in India flowed into early-stage rounds, even though cheque sizes were small.

chart visualization

Smaller cheques reflect investor willingness to fund pilots and technical validation, not manufacturing, certifications, supply chains, and market expansion that define later TRLs.

“TRL 1–3 is really about research and proof-of-concept, and most of this happens within academia and their labs,” said Natarajan Malupillai, Group CEO of IIT Madras Research Park and the IITM Incubation Cell. At this stage, there’s uncertainty around the underlying science, and investors are unsure whether lab results would translate into real-world applications. As a result, this phase is largely supported by non-dilutive capital through government grants, institutional funding, and mission-led research programmes.

The transition begins at TRL 4–6. “In IIT Madras Research Park, we are seeing several ideas reach the TRL 4–6 stage where successful lab projects are taken up by entrepreneurs to build and test prototypes,” Malupillai told AIM. “This is where they test the idea’s ability to fit real-life, still-limited scenarios. Most are able to decide on a minimum viable product at this stage. Once the MVP is proven, it is about extended validation in a real-world environment (TRL 7-10).”

But it is precisely here that risks multiply.

The Valley of Death: TRL 5–7

“Startups face their toughest challenges during TRL 5–7, the ‘Valley of Death,’ where they move from lab validation to real-world prototypes,” explained Rounak Lodha, Investment Professional at BlackSoil. This phase demands heavy investment in certifications, compliance, supply chains, and customer engagement, forcing a shift from R&D to commercialisation.

Deepak Gupta, General Partner at WEH Ventures, describes it as a chasm between science and revenue. “TRL 4–7 is sometimes called the Valley of Death, as there is a gap between the science and real revenue here, and a few years can fly by. Sometimes a company lingers at TRL 7–8 (advanced technological maturity) while validating reliable, scaled operations. That may take two to three years until reference customers and predictable revenue emerge.”

Sunil Gupta, co-founder and CEO of deep tech company QNu Labs, identifies TRL 6–7 as the most punishing. “This is where capital requirements rise sharply as we expand R&D, build a go-to-market team, scale delivery, and invest in processes—all at the same time,” he said. “We were ahead of the market and had to sustain long R&D cycles while evangelising a new technology in a still-nascent ecosystem.”
Successfully crossing this phase, he added, requires patience, resilience, and strong alignment between technology vision and commercial execution.

How Investors Read TRLs

While TRLs are not a strict checklist, technology maturity strongly influences funding decisions. “Most deep tech investors typically enter at TRL 4–6, when technology progresses beyond research and demonstrates real-world viability through testing and prototype deployment,” Lodha noted. At this stage, market potential becomes visible, even as scaling risks remain high.

Investors, however, look beyond readiness levels. “While TRL is a useful benchmark, investors prioritise IP strength, market potential, and the team’s execution capability,” he added.

Sunil Gupta explained how diligence deepens as startups advance. “Investors engage with industry experts, academia, and domain specialists who can independently validate the science and its long-term defensibility. They look closely at whether the technology can survive real-world conditions, scale reliably, and integrate into existing infrastructure.”

From there, focus shifts to proof of business: how products are bought, deployed, and scaled; whether multiple use cases exist; and how adoption timelines align with market readiness. “Working demos, field deployments, customer pilots, and certifications significantly reduce perceived risk,” he noted.

For Pratip Mazumdar, co-founder and partner at Inflexor Ventures, startups don’t flash on his investment radar in the idea stage. “We enter when there’s early proof of a pilot with a large client or a working prototype with validation. Even if revenue is small, the signal is clear.”

Founders Must Evolve Too

As startups move from TRL 3+ to TRL 7+, founder skill sets must evolve. Research excellence alone is no longer sufficient; product thinking, financial discipline, and market engagement become critical.

“The most profound transition occurs between TRL 4 and 6,” added Vishal Kataria, VP at Ankur Capital. “Founders must shift from an inward-facing R&D mindset to an outward-facing commercial one. The priority expands from technology to product, customer pilots, and market discovery.”

Many academic founders struggle with this shift, necessitating onboarding complementary co-founders or early leadership hires.

Hariprasad C, chief strategy officer of semiconductor company Netrasemi, noted, “Of course, we startups will always be obsessed with the technical capability of what we have envisioned. But along with that, if you are able to bring up the right market relevance of the technology and the uniqueness, it stands out.”
“It doesn’t matter whether you are in a very, very early stage or on the ideation stage; it’s about the vision of how to take it forward from the initial conception level to making it the POC,” he reaffirmed.

Why Ecosystems Matter More Than Capital

“Funding alone does not determine survival. It’s the depth and diversity of the support system that really makes the difference,” Malupillai says. Incubators improve survival rates by offering shared labs, mentorship, peer networks, and access to mature industries, lowering the hurdle rate for deep tech founders.

Manas Pal of startup accelerator PedalStart echoed the sentiment. “Most early-stage founders don’t just need capital but hands-on execution support across legal, finance, product, growth, and hiring. Our ecosystem is built around co-building, not just connecting.”

Malupillai added that policy-backed structures also play a catalytic role. Multi-strategy funds like SIDBI Fund of Funds and sectoral schemes such as BIRAC’s Biotechnology Ignition Grant reduce early-stage risk and signal credibility, encouraging VCs to co-invest. Increasingly, tri-sector models are emerging where academia retains IP, startups drive productisation, and corporates provide validation and market access.
“This shift from siloed ownership to jointly developed, market-validated innovation distributes risk more equitably,” Malupillai noted. “And it significantly improves the odds of survival.”

Bridging TRL 4–7 requires more than capital; it demands patience engineered into portfolios, founders willing to evolve, customers willing to pilot early, and ecosystems designed to absorb failure without killing momentum. Until that middle stretch is better supported, India’s deeptech breakthroughs will continue to shine brightest only at the edges.

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Agentic AI: From Hype to Last-Mile Adoption 

The next wave of enterprise AI is not just about systems that respond — it’s about those that can reason, act, and adapt. Welcome to the age of Agentic AI, where intelligent agents carry out complex workflows, collaborate with humans, and continually learn to improve business outcomes.

1. Agentic AI — A Fast-Growing Frontier and Industry Momentum

Agentic AI represents a leap from static automation to autonomous decision intelligence.

The market is already showing tremendous momentum — projected to reach USD 93 billion by 2032 (CAGR ~45%). This growth is powered by enterprises embedding agentic systems into everyday workflows — from customer support and supply chain to marketing and demand planning.

Simply put, Agentic AI is becoming the operating system for enterprise intelligence. 2025 has also seen a surge in ecosystem activity. For instance, Accenture and HCLTech–Google Cloud unveiled frameworks to assist enterprises in scaling multi-agent systems. These partnerships signal a clear shift — Agentic AI has moved beyond the innovation labs and into boardroom strategies.

2. Position on the Hype Cycle

Agentic AI is currently at the peak of interest on the hype curve. There’s excitement, experimentation, and a flurry of pilot programs — but few large-scale, production-grade deployments yet.

Enterprises now face the crucial test: moving from “can we build it?” to “can we scale it safely, measure it, and sustain value?”

3. Enterprise Outlook: Curious but Cautious

Fortune 500 companies are eager to embrace Agentic AI — but they’re also pragmatic.
Governance, reliability, and explainability remain top concerns. The opportunity is undeniable, but success depends on disciplined implementation, clear KPIs, and scalable architectures.

4. From ROI to RO(A)I

Traditional Return on Investment (ROI) metrics fall short for agentic systems.
We need to look at Return on (Agentic) Intelligence (RO(A)I).

This involves measuring various aspects such as tasks that are autonomously executed or accelerated, human hours saved and effectively redeployed, and the reduction in decision-cycle time. Additionally, it encompasses continuous learning and ongoing improvement.

5. The Tredence Approach: From Pilot to Production

At Tredence, we see Agentic AI as a key enabler of Last-Mile Adoption — turning insights into measurable impact.

Our approach combines deep industry understanding with innovation driven by Tredence Studio, our in-house innovation arm. This integration ensures that every solution is contextual, relevant, and ready for adoption.

We adopt a pilot-to-production approach that goes beyond mere proof-of-concept. Our goal is to build intelligent systems capable of learning, adapting, and delivering sustained business outcomes.

We also prioritise clarity on measurement, defining success upfront by tracking metrics such as productivity, efficiency, cost reduction, and business value. This ensures that every agentic initiative drives real results, not just activity.

Ultimately, Agentic AI is a vehicle for achieving business impact. The true objective is to enhance customer satisfaction, improve on-shelf availability, optimise return on ad spend, refine promotions, and attain various other business goals.

By enabling insights faster, at scale, and at lower cost, Agentic AI helps organisations convert intelligence into action — driving the next frontier of enterprise value creation.

Introducing MilkyWay: Multi-Agentic Decision Intelligence

Our latest innovation, MilkyWay, advances this vision further. MilkyWay is Tredence’s multi-agent workflow and decision intelligence system, designed to coordinate multiple agents across data, analytics, and insights workflows. It aims to increase analyst productivity fivefold and deliver up to 50% cost savings — helping enterprises transition from manual analysis to autonomous decision-making at scale.

In essence, MilkyWay exemplifies how Agentic AI can unlock exponential gains in efficiency and agility.

At Tredence, we’re helping enterprises move from insights to action, from pilots to production, and from ROI to RO(A)I — ensuring Agentic AI becomes a sustainable driver of transformation, not just another wave of hype.

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Manus–Meta Deal May Come Under Scrutiny From Beijing: Report

Meta’s recent acquisition of Singapore-based AI startup Manus could attract scrutiny from Chinese regulators over potential violations of technology export controls, according to the South China Morning Post.

The report cited Cui Fan, the deputy general secretary and director of research at the China Society for WTO Studies.

Fan said regulators would focus on whether any technology restricted or prohibited under Chinese law was transferred overseas without approval.

He pointed to China’s Regulations on Technology Import and Export Administration, under which authorities may assess when, how, and what technologies were moved abroad by Manus’ onshore entities, including both individuals and companies.

The concern arises because Manus, now headquartered in Singapore, was founded in China in 2022.

The company was established by a China-based team and raised $75 million in a Series B round in April 2025, led by US venture firm Benchmark, valuing it at about $500 million. The funding drew scrutiny from US regulators due to executive orders limiting American investment in Chinese AI companies, prompting a Treasury Department review.

After the round, Manus shifted its headquarters to Singapore and scaled back its China operations. This included layoffs in mainland China, shutting down local operations, cancelling plans for a China-specific product, and ending technical collaboration discussions with Alibaba.

However, despite attempts to distance itself from China, regulatory exposure may persist.

Fan also noted that there has been no confirmation that Manus’ core team members have renounced Chinese nationality or that they are no longer subject to Chinese jurisdiction.

He added that Manus’ mainland-registered parent company, Butterfly Effect, remains with the founding team, and that the firm’s early research and development was conducted in China.

Other experts quoted in the report said AI agents are likely to be classified as “important information technology products and services” under Chinese regulations, which could bring the Meta–Manus deal within the scope of China’s national security review of foreign investment.

The situation echoes the regulatory dynamics seen in the long-running TikTok saga. In that case, Beijing asserted jurisdiction over core technologies developed in China, particularly recommendation algorithms, even as parent company ByteDance sought to ring-fence or divest overseas operations.

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Why Flexible Workspaces Are Becoming the Default Choice for GCCs in India

India’s global capability centre (GCC) story is now in a decisive new phase. What was once a real estate decision is now a well-plotted business call for many multinational companies, and flexible, managed workspaces are increasingly becoming the epicentre of that shift.

The rapid evolution of GCCs is facilitated by co-working spaces, which behave less like properties and more like operating systems, offering plug-and-play facilities, infrastructure, compliance, talent access, innovation ecosystems, and allied services.

This changing equation was the focus of a recent discussion at AIM on ‘How GCCs are Reshaping India’s Office Market.’ It featured Harsh Binani, Co-founder of Smartworks—one of India’s largest managed workspace platforms, and Gaurav Vasu, Founder and CEO of UnearthInsight, a leading GCC intelligence and research firm.

GCC’s Real Estate Boom

According to India’s Next Commercial Real Estate Wave report, India’s commercial real estate office space market is projected to grow to $120-130 billion (economic activity) by 2030, reflecting a strong 20-22% CAGR.

A large share of this growth is driven by GCCs, as per UnearthInsight’s projections. They are expected to drive 160–200 million square feet of new office demand by 2030, with flexible and managed workspaces capturing a significant share of this growth.

“What’s fundamentally changed is the type of GCCs coming into India,” Vasu observed. “In 2025 alone, India saw roughly 101 new GCCs, and nearly 45–50% of them were mid-sized or nano GCCs.”

These GCCs typically start small—often with 50 to 200 people—and scale in waves. For them, committing to long-term leases and heavy upfront capital expenditure doesn’t make sense.

“They want to operate asset-light, scale gradually, and focus on speed-to-market,” Vasu explained. “That’s where flex spaces give them a massive advantage—not just on cost, but on bundled services, compliance, and readiness.”

India’s Office Market Hits an Inflection Point

For Binani, the shift is part of a much larger structural transition in India’s office ecosystem.

“In 75 years, India has built roughly one billion square feet of office space,” he said. “But as India moves toward becoming a developed economy by 2047, the demand for high-quality, future-ready office space will grow exponentially.”

Flexible workspaces, once a niche concept, are now mainstream. According to a Cushman & Wakefield report, flex space in India grew to 85 million square feet in December 2025. “It’s more than 10% of total commercial real estate. That’s the fastest adoption globally,” Binani noted.

The real momentum lies at the intersection of GCC growth and managed workspaces. “Gone are the days when India was only a back-office destination,” Binani said.

“Today’s GCCs house analytics, R&D, engineering, and core decision-making functions. Their growth is non-linear—and flex models absorb that uncertainty far better than traditional leases.”

Speed-to-market has become non-negotiable. “Within 60 to 90 days, GCCs want to move from blueprint to operational floor,” Binani explained. “Flex campuses allow that, while also offering scalability across cities and a globally consistent employee experience.”

This is where Smartworks has carved out its edge. “More than 15% of our portfolio today comes from GCCs,” he noted. “We’re seeing demand not just from large GCCs, but increasingly from nano and mid-sized centres that want to grow with us over time.”

Vasu believes this marks a structural shift in how offices are perceived. “We’re entering an era where offices behave like platforms rather than properties,” he said.

This shift has dramatically reduced setup timelines. “Pre-2019, setting up a 250–500 person GCC could take 120–180 days,” Vasu noted. “Today, that’s down to 60–65 days—including licensing, branding, and custom innovation spaces.”

Tier-2 Cities and the Hub-and-Spoke Model

The UnearthInsight report also highlighted growing interest in GCCs beyond Bengaluru, Hyderabad, and Pune. Tier-2 cities now account for nearly 9% of new GCC units, up from under 4% five years ago.

However, it’s not just about lower coworking costs.

“The real differentiator for tier-2 cities is talent density,” Binani observed. “The gap is shrinking, but tier-1 cities still offer unmatched depth in mid-to-senior leadership.”

Vasu pointed to cities like Coimbatore and Ahmedabad as early success stories.

“What unlocked these markets was the return of mid-level talent post-COVID-19. Once leadership depth improves, GCCs follow.”

The future, he said, lies in a hub-and-spoke model. “Your primary hub may remain Bengaluru or Chennai, but tier-2 cities increasingly serve as second and third centres, for resilience, business continuity, and employee experience.”

Workspace experience has become a board-level consideration.

“Attrition in tier-2 GCCs is often under 5%, compared to the national GCC average of around 10%,” Vasu said. “Commute times, quality of life, and ecosystem maturity matter—especially for high-end product and R&D teams.”

India’s Workplace by 2030

Looking towards 2030, both leaders see India firmly positioned as a global operating nerve centre.

“The jury is out—India is no longer an experiment,” Binani declared. “It’s a permanent, long-term global operating base. Our next real estate cycle won’t be defined by how much we build, but by how fast and flexibly we deploy it.”

Vasu agreed. “By 2030, India could host over 2,500 GCCs. Work and workplace will be fully integrated—experiential, platform-driven, and deeply embedded into global value creation.”

Flex spaces may be the perfect springboard for India’s GCC boom, in turn shaping global tech strategies from Indian soil. As Binani concluded, “We’re moving toward a world where India doesn’t just support global HQs—but increasingly informs where global HQs start their day.”

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From OpenAI to Groq, 6 VC Trends That Captured AI Funding Gold Rush of 2025

The year gone by was stellar for the AI ecosystem. In 2025, venture capital flowed like a river for many late-stage and application-led AI companies, as AI reshaped the entire tech investment landscape.

According to Crunchbase, global investment in AI reached $202.3 billion by Q3 2025, a 75% year-on-year increase. AI alone accounted for nearly half of all global venture funding in 2025, concentrating capital at a scale rarely seen in private markets.

Here are some of the AI funding highlights from 2025:

OpenAI Raised Whopping $40 Bn

While reports hinted at OpenAI pursuing an IPO, the AI pioneer, in 2025, raised unprecedented capital, making it the largest private tech fundraising event in US history.

In April 2025, OpenAI closed a $40 billion financing fund led by Softbank, with $10 billion in mid-April and an additional $30 billion in December.

Following the deal, OpenAI’s valuation continued to climb through secondary transactions, with employee and insider share sales implying a valuation near $500 billion by October.

By December 2025, the company was reported to be in preliminary talks to raise to $100 billion more at a valuation in the range of $750–830 billion.

Anthropic: High Funding, Higher Valuation

OpenAI’s fiercest private competitor, Anthropic, projected the discipline of a public-market company, even as it played down near-term IPO plans. Executives told Financial Times that discussions about a public listing remained preliminary, with no fixed timeline or decision in place.

In March 2025, it raised $3.5 billion in a Series E round at a $61.5 billion post-money valuation, led by Lightspeed Venture Partners and with participation from Bessemer, Cisco, Fidelity, and others, cementing investors’ faith in its Claude models.

That momentum accelerated with a $13-billion Series F haul in September, lifting its valuation to about $183 billion. The round was co-led by ICONIQ Capital, Fidelity and Lightspeed, among a broad syndicate of institutional backers.

External analyses indicated that Anthropic was on track to reach profitability years ahead of rivals like OpenAI, with forecasts suggesting a break-even point around 2028 as revenue growth from enterprise customers surged and cost efficiency improved.

Reports in December 2025 indicated that Anthropic is in talks for a new private funding round that could value it at over $300 billion.

Databricks: More Late-Stage Capital

Databricks CEO Ali Ghodsi has been vocal about avoiding the public markets when conditions aren’t favourable, famously saying it was “dumb to IPO” in 2024 and opting instead to tap private capital while preparing the business for eventual listing.

Databricks sustained strong investor demand through 2025.

In August, the company cashed in a $1 billion Series K investment at a valuation of roughly $100 billion. Later, in December, Databricks announced a Series L funding round exceeding $4 billion.

This huge late-stage raise underscored sustained investor appetite as demand for AI-driven data platforms continued to accelerate.

With an annual revenue run rate of about $4.8 billion, positive cash flow, and a valuation of roughly $134 billion, the company is increasingly challenging conventional wisdom around when—or even whether—high-growth technology firms need to go public.

Anysphere: Now Valued at ~$30 Bn

Cursor’s parent company, Anysphere, had a breakout funding year as its AI-driven developer tool quickly became one of the most popular platforms for software engineers.

Built around the AI coding assistant Cursor, the company’s growth attracted escalating venture capital interest throughout the year, beginning with a $900 million Series C round in July led by Thrive Capital with Andreessen Horowitz, Accel, and DST Global at a roughly $9.9 billion valuation.

That momentum continued into late 2025, when Anysphere closed a $2.3 billion Series D financing, with participation from heavyweight strategic backers including NVIDIA and Google, that lifted its valuation to about $29.3 billion.

Meta’s Minority Stake in Scale AI

Scale AI, the leading data infrastructure provider for training and evaluating AI models, remained one of 2025’s most capital-intensive private tech stories outside of core model builders when Meta Platforms agreed to invest $14.3 billion in June 2025 for a 49% stake, valuing the company at around $29 billion and expanding its commercial collaboration with the tech giant.

A key component of the deal was Scale co-founder and CEO Alexandr Wang transitioning to Meta to lead its Superintelligence Labs, a bespoke research unit focused on next-generation AI capabilities, while remaining on Scale’s board—a move that underpinned much of Meta’s strategic rationale for the investment.

Europe’s AI Giants: Lovable & Mistral Raise Big Money

As demand for vibe coding platforms surged in 2025, the Stockholm-based startup Lovable stocked up on cash. In July, it raised a $200 million Series A led round by Accel at a $1.8 billion valuation, making it one of Europe’s fastest-growing unicorns just months after launch.

Building on that momentum, in December, the company secured a $330 million Series B round at a valuation of $6.6 billion, led by CapitalG and Menlo Ventures, and with participation from Khosla Ventures, Salesforce Ventures, and Databricks Ventures.

However, the Swedish startup stands second in the list of most valuable AI startups of Europe, with Mistral taking the crown. The French foundational AI model maker closed a €1.7 billion (≈$2 billion) Series C funding round at an €11.7 billion valuation in September.

The round was led by Dutch semiconductor equipment giant ASML, which invested about €1.3 billion and became Mistral’s largest shareholder with an 11% stake, alongside continued participation from existing backers including DST Global, Andreessen Horowitz, Bpifrance, General Catalyst, Index Ventures, Lightspeed, and NVIDIA.

OpenAI Alumni Raised Big Money

OpenAI alumni continued to shape the 2025 AI funding landscape, with SSI and Thinking Machines Lab emerging as among the most closely watched new ventures.

Safe Superintelligence Inc. (SSI), co-founded by OpenAI’s former chief scientist Ilya Sutskever with Daniel Gross and Daniel Levy, raised in $2 billion in March at a $32 billion valuation, despite having no product or revenue yet, attracting involvement from Greenoaks as lead investor and participation from Lightspeed, Andreessen Horowitz, Alphabet, and NVIDIA.

Alongside SSI, Thinking Machines Lab, founded in early 2025 by former OpenAI CTO Mira Murati and staffed with researchers from OpenAI, Meta and other leading AI groups, closed a massive ~$2 billion seed round in July led by Andreessen Horowitz at a $12 billion valuation.

Later in the year, the company unveiled its first product, Tinker, to help researchers and developers access compute easily for ML and AI research.

AI Hardware Companies: Cerebras Billion Dollar Funding, Groq Joins NVIDIA

Shortly after withdrawing its IPO registration in October 2025, chipmaker Cerebras Systems raised $1.1 billion in a Series G financing at an $8.1 billion valuation in September 2025, led by Fidelity Management & Research and Atreides Management, with participation from Tiger Global, Valor Equity Partners. and 1789 Capital.

This underscored continued private investor support for its wafer-scale AI compute technology and expansion of cloud and enterprise deployments.

Groq, another prominent AI chip startup, focused on inference architectures and strengthened its financial footing in 2025 with a major funding round of approximately $750 million at a $6.9 billion valuation, reflecting growing demand for efficient inference hardware even as NVIDIA dominates training compute.

In December, the company entered a licensing and talent agreement with NVIDIA, under which NVIDIA licensed Groq’s inference technology and onboarded key executives, including founder Jonathan Ross and President Sunny Madra, while Groq continues to operate independently. The deal was reported to be worth up to roughly $20 billion.

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Karnataka’s 2025 Funding Trends Hint at a Tougher Break Ahead for Startups

Karnataka remains India’s largest technology startup hub by sheer volume, but 2025 marked a clear inflection point. The state’s startup ecosystem is no longer in a phase of rapid expansion. Instead, it is entering a more disciplined era defined by execution, selective funding, and a growing emphasis on AI and deep technology as long-term economic engines.

According to Tracxn’s Karnataka Tech Report 2025, the state hosts over 17,000 active startups, making it one of the largest technology ecosystems in the country. Yet this scale is overwhelmingly concentrated in the state capital, with Bengaluru home to over 15,800 active startups—accounting for 95% share.

While the state government has been trying to decentralise innovation through initiatives like Beyond Bengaluru, Bengaluru has solidified its position as the central hub for talent, capital, and enterprise.

Slowdown in Startup Formation

Between 2016 and 2021, Karnataka experienced a sustained surge in new startups, supported by strong venture inflows and Bengaluru’s expanding engineering workforce.

chart visualization

The cycle peaked in 2020, when 2,411 tech startups were founded, followed by another 1,914 startups in 2021. The momentum has cooled over the last few years, with 1,415 startups founded in 2022, and the number has declined further to just 243 in 2025.

Rather than signalling contraction, this slowdown reflects a maturing ecosystem. Investors are backing fewer companies, but with far clearer expectations around revenue visibility, operating discipline, and scale potential.

As Shobhit Gupta, principal investor at Avataar Ventures, observed in a conversation with AIM, “Over the last decade, venture capital globally pushed IPO thresholds higher and higher. India today looks like what the US used to be—an environment where scaled, profitable technology companies can access public markets earlier and more rationally.”

With investors’ early-stage risk appetite thinning, the bar for first-time founders without revenue or networks to break out has risen sharply.

When Will Companies Move Out of Bengaluru?

While Karnataka’s policy ambition includes expanding startup activity beyond Bengaluru, outcomes remain decisively city-centric. Of the 25,338 tech startups founded in the state, 23,424 are headquartered in Bengaluru.

Funding mirrors this imbalance. In 2025, Karnataka-based startups raised $3.6 billion across more than 500 funding rounds, but Bengaluru accounted for roughly 99% of total capital deployed. The top 10 startups alone captured 31% of total funding, underscoring how capital is consolidating around a smaller group of execution-ready companies.

Gupta argues this is not accidental. “Bengaluru benefits from a structural flywheel, founders who have scaled globally, investors who understand modern tech business models, and public market investors who are now comfortable underwriting SaaS and AI-led companies,” he said.

However, the recently updated IT policy aims to develop tech hubs in tier-2 and beyond cities, including Mysuru, Mangaluru, Belagavi, Hubballi, Tumakuru, Kalaburagi, and Shivamogga. It offers significant support for startups, including 50% rent reimbursement, up to 50% recruitment assistance, and an internship programme that reimburses up to ₹5,000 per intern.

Additionally, it covers 20% of skilling expenses for deep tech firms and provides full reimbursement of electricity duties and 30% off property taxes for IT companies and startups outside Bengaluru.

Does the Geography Matter?

While policy narratives often emphasise decentralisation, founder experiences suggest that Bengaluru’s density materially affects outcomes.

Vikram Jayaram, founder and CEO of deep tech startup Neuralix AI, said, “When you’re building for legacy industries or government systems, access to specialised talent, research institutions, and decision-makers matters. That concentration exists in Bengaluru in a way that’s very hard to replicate elsewhere.”

Similarly, Saravana Kumar, founder and CEO of Kovai.co, acknowledged the trade-offs of building outside the city. “Even today, the ecosystem for visibility, hiring, and capital is far stronger in Bengaluru. There are very few places where you get all three together,” he noted.

But moving beyond metros also has its upsides, especially when it comes to employee retention. Kumar explained that Coimbatore allowed Kovai.co to build long-tenure teams with lower churn, which was critical for a bootstrapped SaaS company.

AI and Deep Tech as Core Investment Thesis

Karnataka’s Startup Policy 2025-2030, backed by a ₹518 crore outlay, aims to position AI, quantum computing, and deep technologies as the state’s next growth engines. Investor capital is already aligning with this direction.

As Karthikeyan Madathil, Partner at Yali Capital, observed, “For the first time, we’re seeing Indian founders build real deep tech and infrastructure-level companies, not competing on cost arbitrage, but on core technology and IP, often for global markets from day one.”

In 2025, AI-focused startups in Karnataka raised $223 million, nearly all of it in Bengaluru, according to the Tracxn report. Startups such as Pixis, Aisera, Yellow.ai, Sense, Krutrim, and Sarvam have strengthened the city’s capabilities in applied AI, enterprise platforms, infrastructure-layer companies, and emerging foundational capabilities.

From an investor lens, this marks a meaningful transition. “Historically, Indian startups excelled at the application layer,” Gupta explained. “What’s changed is that founders are now building true infrastructure and deep tech companies, robotics, AI platforms, developer tools, that compete globally on technology, not cost.”

This shift has significantly altered how capital is deployed. Madathil noted, “Long-term capital is now willing to back deep tech companies, with an estimated 30-40% of venture allocations expected to flow into deep tech over the next few years.”

Gupta also emphasised that venture funding allocations, previously reserved for consumer tech and fintech companies, will shift towards deep tech and AI-led companies.

This pivot aligns with the Karnataka government’s ambitious plans to establish Bengaluru as India’s “quantum capital” by developing a Quantum City on 6.17 acres in Hesaraghatta. With a ₹1,000-crore investment, the state aims for a “quantum economy” by 2035 and plans to train 50,000 professionals for the space sector while attracting $3 billion in investments.

IPOs Are Emerging

Exit dynamics further underline this maturity. In 2025, Karnataka recorded 45 acquisitions and 10 IPOs, with public markets slowly gaining traction as a viable liquidity path.

Gupta cautioned against seeing IPOs as default outcomes, but noted that conditions are unusually favourable for quality tech companies. “India offers an earlier IPO window; companies with around $100 million in revenue and 15–20% EBITDA margins can attract serious research coverage and long-term institutional capital,” he said.

Crucially, domestic capital has matured. “Mutual funds, pension funds, and insurance capital now understand vertical SaaS and AI businesses. That depth of understanding didn’t exist a decade ago,” Gupta added.

He cited SaaS company Capillary Technologies as a recent example, with its Rs 877-crore IPO oversubscribed by about 53 times due to strong retail and institutional demand. Domestic mutual funds accounted for around 70% of the institutional share, a notable increase from the 30–40% seen in earlier tech IPOs.

“That said, it is still early to declare IPOs as the default exit path for Indian startups,” Gupta noted.

Taken together, Karnataka’s data and investor sentiment point to an ecosystem that is tightening rather than broadening. For founders, this environment is more unforgiving. For investors, it is undeniably healthier. For Karnataka as a whole, however, the picture is more complex.

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MEITY Approves 22 Proposals With ₹41,863 Cr Investment Under ECMS

The Ministry of Electronics and Information Technology (MeitY) has given green-lighted 22 new proposals under the third phase of the Electronics Components Manufacturing Scheme (ECMS).

This involves a projected investment of ₹41,863 crore and an anticipated production value of ₹2,58,152 crore, according to a note shared with media representatives on January 1, bringing the total number of approved projects to 46.

“In continuation of the approvals of 24 applications for an investment of ₹12,704 crore announced earlier, MeitY has further approved 22 proposals under the ECMS,” the background note said, as reported by Hindustan Times.

The approved proposals came from companies including Dixon, Samsung Display Noida, Foxconn, and Hindalco Industries.

Earlier in October, the ministry granted approval for seven projects valued at ₹5,532 crore in the first tranche, followed by 17 projects totalling ₹7,172 crore in the second tranche on November 17.

Union IT Minister Ashwini Vaishnaw distributed the approval letters to the companies in a meeting on January 2.

The 22 projects sanctioned in this third tranche are projected to yield a production output of ₹2,58,152 crore and create 33,791 direct job opportunities. This amount is more than double the combined production value of ₹1,09,517 crore that was anticipated from the first two tranches.

The ECMS, announced in April 2025 with a budget allocation of ₹22,919 crore over six years, has attracted significant interest from both domestic and international investors.

A total of 249 applications propose overall investments of ₹1.15 lakh crore, expected production of ₹10.34 lakh crore, and the potential creation of 1.42 lakh jobs, as per MeitY data from early October.

As per the media note, the recent approvals pertain to manufacturing in 11 product categories, including mobile devices, telecom gear, consumer electronics, automobiles, IT hardware, and strategic electronics.

The approved items consist of five main components: PCBs, capacitors, connectors, enclosures, and Li-ion cells. Additionally, there are three sub-assemblies: camera modules, display modules, and optical transceivers, along with three supply chain products: aluminium extrusions, anode materials, and laminates.

These projects will take place in eight states: Andhra Pradesh, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Tamil Nadu, Uttar Pradesh, and Rajasthan.

The background note indicated that the approvals are intended to significantly enhance local supply chains, reduce reliance on imports of essential electronic parts, and promote the development of advanced manufacturing capabilities in India, as per reports.

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OpenAI Building New Voice Model Ahead of AI Device Launch: Report

OpenAI is working on a new AI audio model architecture, which is slated to release in the first quarter of this year, reported The Information.

This model is also being developed for the new voice-based device the company is working on, added the report.

Furthermore, OpenAI has restructured and brought together several engineers and researchers in a team to build the new AI model. It is expected to bring significant improvements in accuracy, emotion, more natural responses while also being able to handle interruptions like a real conversation partner.

Last year, OpenAI deepened its push into hardware by partnering with former Apple design chief Jony Ive. In May last year, Ive’s startup io, focused on building hardware products around artificial intelligence, was acquired by the AI giant in a nearly $6.5 billion all-stock deal.

It also marked the next phase of a two-year collaboration between Ive’s design firm LoveFrom and OpenAI, to lead design for the AI giant’s future hardware and software.

In July last year, OpenAI ramped up its hiring across multiple positions in the consumer hardware sector, with positions open for hardware systems product designer, to help build the ‘next generation of world’s most innovative mobile devices’.

According to a Wall Street Journal report from last year, Altman and Ive hinted that these AI companion devices would be fully aware of the user’s surroundings while offering an ‘unobtrusive’ experience. The report added that these devices would be standalone units, and will be released later this year.

Last August, OpenAI made its Realtime API generally available with new features and released its “most advanced” speech-to-speech model, gpt-realtime.

The company claimed that gpt-realtime is better at interpreting system messages and developer prompts.

This includes reading disclaimer scripts word-for-word on a support call, repeating back alphanumerics, or switching seamlessly between languages mid-sentence.

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