The first GenAI unicorn in India moves to cloud services as aspirations for AI models come true

Krutrim, India’s first GenAI unicorn, is shifting its focus from building AI models to cloud services, signaling a major change in strategy after months of limited product activity.

The company said the move comes after a business overhaul in late 2025, which included reallocating resources and pausing its chip design efforts. The shift follows more than a year after the release of its Krutrim-2 model, with no major new product announcements since then.

Founded by Bhavish Aggarwal, who also leads Ola and Ola Electric, Krutrim was initially positioned as a key player in India’s AI ecosystem. It aimed to compete with global AI leaders like OpenAI and Anthropic by building homegrown models.

However, the startup has faced challenges, including layoffs of over 200 employees and the removal of its Kruti AI assistant app from app stores earlier this year. Its absence from major industry events, such as the AI Impact Summit in New Delhi, also highlighted its reduced public presence. Meanwhile, rival Sarvam has remained active with new model launches and partnerships.

Despite these setbacks, Krutrim reported strong financial growth, with revenue reaching ₹3 billion (around $31.5 million) in FY2026 — a threefold increase from the previous year — along with its first annual profit. However, questions remain about how much of this revenue comes from external customers versus internal business within the Ola ecosystem.

The company says demand for its AI cloud services is increasing, with over 25 enterprise clients across sectors like telecom, finance, and healthcare. Most of its GPU capacity is already being used for external workloads.

Analysts suggest that focusing on cloud infrastructure may be a more practical short-term strategy in India’s AI market, where building large-scale AI models remains expensive and complex.