As data, tech sovereignty weighs in on nations at a time when the global world order is being rewritten, deep tech companies have started to get a fair share of investor attention in India, in the AI era.  A report from India Deep Tech Alliance (IDTA), - ‘AI & Deep Tech Investments Landscape’ released at the India AI Impact Summit 2026 noted that deep tech investments in India have scaled materially over the past decade, with investments aggregating $27.9 billion across 2,178 deals involving 1,217 companies, while the share of deep tech within the total PE–VC funding has risen from 4% in 2016 to 15% in 2025.  

IDTA is an industry‑led alliance of leading U.S. and Indian investors such as 3one4, Accel, Premji Invest, NVIDIA, Qualcomm Ventures, looking to invest $1 bn over the next 5-10 years in India‑domiciled deep‑tech companies. While the funding volumes in to the space peaked during the 2021–22 and moderated thereafter, report says, “The  shift reflects broader institutional acceptance of deep tech categories including AI, space tech, defence, climate, and advanced engineering, alongside increasing availability of patient, risk-tolerant capital suited to longer development and commercialization timelines”.

At the AI summit discussion focused on - ‘AI & Deep Tech in India: Capital, Innovation & Ecosystem Growth’, Siddarth Pai, Founding Partner, 3one4 Capital pointed at 3 broad changes happening within the Indian investor ecosystem driving the bullishness on deep tech. One, LP appetite for longer return cycle deep tech companies, second, funds like the Research Development and Innovation (RDI) Fund bridging the gap between research to the actual development and commercialization and third, the maturity of the entire Indian startup ecosystem itself. “The RDI has now become a nucleus around which a large amount of capital formation can happen, by bringing up to 50% of the funds, by giving grants over to research to development across the Technology Readiness Levels,” Pai said, adding that it would take over 6-7 years for the fund of the size to be deployed and a decade more to show results.

While the propensity of investments into such companies has been skewed towards later-stage companies, the IDTA report noted that capital concentration at later stages has also been influenced by benchmarking against global peers, particularly for companies with international customer bases and visible revenue streams. “This has resulted in funding value being concentrated in fewer, larger transactions, while early-and growth-stage rounds remain more frequent but smaller in size," the report noted.

Drawing distinction between how US investors including family offices where deep tech investments have been a result of government, academia and investors coming together informally and expertise is exchanged, Vardaan Ahluwalia, Premji Invest says, in India, investors' priorities have been more of revenue generation, which in the case of deep tech companies can be much later. However, family offices including Premji Invest are now starting to look actively in the deep text space in India. “VCs and family offices are now stepping into this space, because we see an opportunity in India, because talent is there, capital is coming and we see that,” he added.  

With public policy and sovereign capital alignment and availability of funds to bridge the gap for companies to continue innovation where technical risk remains high, but commercial validation is still emerging, Kris Gopalakrishnan, chairman, Axilor Ventures; co-founder, Infosys said that Indian innovators need to think big. Citing examples of technology from India that has gone global such as Modular Open Source Identity Platform (MOSIP), a  not-for-profit project incubated at the International Institute of Information Technology Bangalore, which helps governments conceive, develop, implement, and own foundational digital ID systems in their countries and deployments in nearly  27 country across Asia Pacific, Africa, Latin America, and the Caribbean or Diksha – digital learning platform that was  developed through philanthropy now running in many schools in Africa and US ,  Kris said, “ Many of these are now moving to develop countries. So technology from India, from a developing country going across the world, you will see now more and more examples with that coming down the line.”

As AI building puts focus on power, efficiency and semiconductors, Kris said 2D materials, analogue computing and software stack, multi linguistic models are next big promising deep tech propositions that have investors watching out. Batting for the companies building sovereign multilingual LLMs in India, he said that with nations across the globe being no longer mono lingual, “I would say these are the next round of innovation, which will now, go from India to the world because ,they will require a new set of LLMs if they want to do native AI,” he added.