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India’s homegrown artificial intelligence startup Sarvam AI has raised $234 million in an ongoing funding round led by HCLTech, marking the first major outsized investment by a listed Indian outsourcing pureplay in the AI foundational ecosystem. HCLTech said it would make a strategic investment of $150 million as part of the round, which is expected to close at $300 million. “By bringing together Sarvam's research in AI models with HCLTech’s global presence, we are creating a differentiated full-stack AI platform for enterprises and governments, strengthening our ability to deliver secure, scalable, and responsible AI solutions,” said C Vijayakumar, CEO & managing director of HCLTech, said in a statement.Bessemer Venture Partners, a new investor, and existing backers Khosla Ventures and Peak XV Partners also participated in the latest round, which values Sarvam at $1.5 billion.Sarvam was last valued at $110 million in 2023, when it raised capital from Peak XV, Khosla Ventures and Lightspeed. Sarvam’s fundraising comes close on the heels of the US export ban on Anthropic, which has triggered calls to accelerate India’s sovereign AI ambitions. While Sarvam’s $300 million round is the largest for an Indian foundational model company, it pales in comparison with the hundreds of billions of dollars that firms such as ChatGPT maker OpenAI and Anthropic have raised. IT’s Value ErosionThe HCL investment assumes significance amid growing concerns that agentic AI could reshape the software services industry by automating substantial portions of coding, maintenance and back-office functions. Several Indian listed outsourcing pureplay stocks have seen their valuations shrink to lowest levels in five years in anticipation their revenue streams could be under severe strain due to the AI-spawned automation onslaught.“We are in an era of sovereign AI. We’ve seen what happened with Fable 5 and Mythos…when you’re running a sovereign AI company, it’s important to get investment that is Indian. That’s why we’ve collaborated with HCLTech for this funding,” Sarvam cofounder Vijay Raghavan told ET, referring to the US restricting use of Anthropic’s most advanced AI models Fable and Mythos by non-US entities.ET had reported in April that investors including US-based growth equity firm Glade Brook Capital, chipmaker Nvidia and Sarvam’s existing backer Lightspeed were also expected to join the funding round.Sarvam’s fundraising comes close on the heels of the US export ban on Anthropic, which has triggered calls to accelerate India’s sovereign AI ambitions. “It’s very clear that the amount of capital that we have raised is very large in the Indian context but is still very small in the global context. We have to continue to be more capital efficient at one stage, but at another level, we need significantly more capital to develop frontier capabilities. We’ve reached the next orbit with this fundraise but we’re still in the early innings of this fundraise,” Raghavan said.Founded in 2023 by Raghavan and Pratyush Kumar, Sarvam is positioning itself as an AI platform for sovereign use cases, focused on building India-first large language models (LLMs) and infrastructure tailored to local languages and data. The Bengaluru-based startup is among a handful of Indian ventures building foundational AI models domestically. In February, it unveiled its first homegrown foundation models — Sarvam-30B and Sarvam-105B — supporting 22 Indian languages.According to a regulatory filing by HCLTech, Sarvam recorded a revenue of Rs 45 crore during fiscal 2026. Its customers include enterprises such as SBI Life, Life Insurance Corporation, IDFC First Bank, Tata Capital and Cred. Raghavan said that with HCLTech joining Sarvam’s capitalisation table, there will be opportunities where both the companies can go to market together in India as well as overseas.Sarvam said its products are rapidly scaling, focused on verticals such as banking, insurance, government tech and defence. Its conversational platform now handles over 2 million interactions a day, with usage having doubled over the last two months.Talking about how the startup plans to deploy the fresh funding it has raised, Raghavan said, “Our positioning from the beginning was that this technology is too important to not understand from a fundamental perspective. Training large language models is only one part of it. We also need compute infrastructure, training frameworks, large-scale inferencing—or a token factory—and agentic orchestration.”“If you want to be completely Atmanirbhar in AI, we need to play across all these layers. This funding enables us to accelerate across them and build the full stack needed to be self-reliant in AI,” he added.Global AI For Bessemer, which has backed Anthropic in the US, Sarvam extends its global AI thesis into India at a time when sovereign models are becoming a key part of the AI infrastructure debate. The venture capital firm partnered with Anthropic in 2024 and has since doubled down on the Claude maker, one of the best-funded AI companies globally.In India, Bessemer has been an active technology investor for nearly two decades, backing companies such as Swiggy, Urban Company, BigBasket, Perfios and Medi Assist. The firm announced a $350 million second India-focused fund last year aimed at backing startups across sectors including AI, SaaS, fintech, healthcare and cybersecurity.“We believe this is going to be India’s AI decade. AI will diffuse into every aspect of our lives—citizen workflows, enterprise workflows and government workflows,” said Pankaj Mitra, partner at Bessemer Venture Partners.Mitra said Sarvam was “one of the next biggest bets that India will see over the next decade,” adding that mission-critical enterprises, citizen workflows and regulated sectors will require sovereign models.Sarvam’s round is the second largest in India’s artificial intelligence space after cloud infrastructure company Neysa closed a $1.2 billion transaction led by US alternative asset manager Blackstone. Vibe-coding startup Emergent is also closing in on a $200-250 million funding round led by private equity firm Creaegis.