India’s first GenAI unicorn turns to cloud services as AI model ambitions meet reality

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.

Crotrim said on Tuesday it was moving toward cloud services, adding that the shift follows a business overhaul in late 2025 that included reallocating capital and talent and pausing chip design efforts. The update comes more than a year after the Bengaluru-based startup launched its flagship Krutrim-2 model.

The move follows a period of limited public activity from Krutrim, which has not made any significant product announcements in recent months, with its last post on X dating back to December. The startup did not appear at any of the sessions of the India AI Impact Summit in New Delhi, where global players such as Anthropic, Google and OpenAI participated.

In contrast, rival Sarvam participated in multiple sessions at the six-day AI event, showcasing new open source models, hardware developments, and business partnerships.

The changes also come after a series of layoffs in Crotrim over the past year, with more than 200 jobs split across multiple rounds, according to local media reports. The startup pulled its Kruti AI assistant app from app stores in April.

Founded by Bhavesh Agarwal (pictured above), who also leads ride-hailing company Ola and electric car maker Ola Electric, Krutrim initially positioned itself as one of the early GenAI contenders in India, seeking to build home-grown alternatives to models from companies like Anthropic, OpenAI and Elon Musk’s xAI. The startup raised $50 million at a $1 billion valuation in January 2024, reflecting early investor enthusiasm for India’s homegrown AI ambitions, even as AI funding in the country remains far lower than in the United States.

Krutrim said it generated revenue of about INR 3 billion (about $31.52 million) in fiscal 2026, a three-fold increase from the previous year, along with its first annual net profit and margins exceeding 10%. The startup did not disclose how much of this revenue came from external customers versus the parent company Ola’s ecosystem. Previous reports had indicated that about 90% of its revenues in fiscal year 25 came from the group’s companies.

However, Crotrim said it is seeing growing demand for its AI cloud services, with more than 25 enterprise customers across sectors including telecoms, financial services and healthcare. It added that most of its GPU compute capacity is already committed to external workloads.

Sanchit Vir Gogia, senior analyst at Greyhound Research, said the move toward the cloud made business sense, but cautioned that Krutrim’s profitability claims would need to be tested. “The standard of proof has to go up with the claim,” he told TechCrunch.

As Crowtrim shifts toward cloud infrastructure, competitors like Sarvam have continued to launch new AI models and sign partnerships, including a recent partnership with space technology company Pixel to develop an AI-driven orbital data center.

As Gogia points out, infrastructure may be the most viable near-term play in India’s AI market, even as the long-term ambition to build competitive models remains.

Krutrim did not answer questions about its exact revenue mix, enterprise client base and recent restructuring.