The Uttar Pradesh government cancelled its Rs. 25,000 crore MoU with Bengaluru-based Puch AI days after signing, citing failure to meet due diligence norms. Invest UP said the startup lacked financial strength and credible backing for a project of this scale, amid backlash over its small size and limited track record.
The Uttar Pradesh government has cancelled its Rs. 25,000 crore Memorandum of Understanding with Bengaluru-based startup Puch AI, just days after the agreement was signed, citing the investor's failure to meet due diligence requirements. This comes after the government faced severe backlash from critics upon announcing the MoU, pointing to Puch AI's small team and lack of any infrastructure track record as fundamental red flags for a commitment of this scale.
Invest UP announces cancellation of MoU
In a post on X, Invest UP, the state's investment promotion body, confirmed the development, stating that the MoU was reviewed as per standard State Government protocols. "Necessary details as per SOP were sought from the investor, but they failed to provide them timely," the post read. Due diligence further revealed a lack of net worth and credible financial linkages commensurate with the project's scale. The body added that no rights or obligations remain under the cancelled agreement, and that the decision reflects the "highest level of probity in governance" that is core to the Yogi Adityanath-led government.
A deal that was always under scrutiny
