AI signage is seen on the opening day of Mumbai Tech Week in Mumbai, India, May 29, 2026. (Photo by Indranil Aditya/NurPhoto via Getty Images)
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Vibe coding startup Emergent on Wednesday became the second Indian artificial intelligence company to be valued at more than $1 billion in a month, signaling that the South Asian country is finally entering the AI race
Emergent, founded a year ago, raised $300 million in a Series C funding round, valuing the company at $1.5 billion, the company said in a news release Wednesday.
Bengaluru-based investment firm Creaegis led the round and was supported by Indian family office firm Claypond and California-based fund Sentinel Global. Existing investors Khosla Ventures, SoftBank Vision Fund 2, Lightspeed and Y Combinator also participated.
“We built Emergent for non-technical entrepreneurs and small business owners, with 70% of our users having no prior coding experience,” said Mukund Jha, co-founder and CEO of Emergent. About 12 million apps were created on Emergent last year by “small business owners and sole proprietors,” Emergent said.
Exactly a month ago, India’s full-fledged state-owned AI company Sarvam raised $234 billion from a group of investors and received a post-money valuation of $1.5 billion.
These developments are “in line with the broader dynamics we are tracking,” Deepika Giri, head of research for AI, analytics and data at IDC Asia Pacific, told CNBC, adding that “almost half of Indian companies are already testing agentic AI solutions.”
This is “unusually rapid experimentation and work automation at scale for a market of this size,” she said.
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Positive signals
Market research firm IDC expects that by 2026, 45% of Indian businesses will use specialized cloud services to access computers, removing a key bottleneck in training and inferences.
It said India also has the most comprehensive AI accelerator stack in APAC NVIDIA, AMDand hyperscaler silicon – giving it a flexibility that most markets lack. An accelerator stack is any hardware that can be used to train AI workloads, while hyperscaler silicon refers to custom-built chips.
These factors, coupled with a huge pool of engineers and AI talent, could help India shed its reputation as an AI laggard, experts said, but cautioned that it is still in its early stages In this trip.
Sarvam’s funding reflects confidence that India can build “valuable intellectual property in indigenous and multilingual AI,” Mohammad Hassan, head of APAC dividend forecasting at S&P Global Market Intelligence, told CNBC.
Emergent’s fundraising highlights the strength of Indian tech talent, which could prove to be “India’s trump card in the long-term AI competition,” he added, calling the developments “positive signals” but not evidence of major change.
India is lagging behind in the global AI competition because it does not yet produce state-of-the-art chips domestically, nor does it yet have a groundbreaking base model that can compete with leading US or Chinese models. Data center capacity also lags significantly behind the AI leaders.
But the South Asian country, which hosted a major global AI conference this year, was confident of making its mark in the AI space by developing applications based on foreign master models.
During the Global AI Summit in February, Indian Prime Minister Modi said his vision was for India to be “among the top three AI superpowers in the world,” not just as a consumer but also as a creator.
As a major exporter of IT services, India has the software talent needed to develop AI applications for the world. But securing full access to basic models remains a key risk to its ambitions as countries increasingly place strategic importance on this technology.
It will take “at least three to four years” for India’s AI ecosystem to reach a point where it creates a “flywheel effect,” Neil Shah, vice president of research at Counterpoint Research, told CNBC’s “Inside India” on Thursday.
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https://www.cnbc.com/2026/07/16/catching-up-in-the-ai-race-india-gets-its-second-ai-unicorn-in-a-month.html
