Indian VCs invest in US AI startups for higher returns

Key facts

• Indian venture capital firms are increasingly investing in US-based AI startups.
• Firms like Peak XV Partners, Activate, and DeVC have made multiple investments in US AI companies.
• Investors cite the search for higher returns and a perceived lack of sufficiently large-return opportunities in India as reasons for US focus.
• Some Indian investors find it challenging to compete with US-based venture capital firms in the US market.
• Agentic Universe, an Indian AI company, is seeking USD10 million to scale its infrastructure.

Indian venture capital firms are increasingly directing investments toward artificial intelligence startups in the United States, driven by the pursuit of higher returns and the desire to strengthen enterprise relationships. Firms such as Peak XV Partners, NuVentures, DeVC, and Activate are actively backing US-based AI companies, with some reporting that a significant majority of their AI investments are now in the US.

Peak XV Partners, for instance, invested in over 10 US AI startups in 2025, including Supabase and PostHog. Activate has supported companies like ElevenLabs and Wispr Flow, while DeVC invested in six US firms last year, such as Answers.ai. NuVentures' cofounder Venk Krishnan stated that the firm is evaluating US-based startups in AI, robotics, and agentic spaces, with approximately 90% of its investments allocated to US AI companies due to a perceived scarcity of innovative, high-return opportunities in India.

While activity in India's AI sector is growing, investors suggest the volume is insufficient for larger funds seeking outsized returns. This has led many Indian VCs to establish a stronger presence in the US, tapping into networks like Y Combinator and leveraging customer referrals. However, competition from established US investors presents a challenge, requiring Indian firms to take greater risks to secure deals. Meanwhile, Indian AI companies like Agentic Universe are also seeking significant funding, with a goal to raise USD10 million to scale their operations amid high demand.