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The central government may end up acquiring a 1-2% stake in AI unicorn Sarvam once its $300 Mn funding round is closed.

According to an ET report, the acquisition pertains to compute infrastructure provided by the government to Sarvam as part of the IndiaAI Mission. The government had received compulsorily convertible debentures (CCDs) in return for the compute infrastructure. These CCDs are now set to convert into equity holdings, translating to a minority stake in the AI startup.

“The Centre will be taking a small stake in Sarvam. The support provided to companies under the IndiaAI Mission needs to be accounted for in some form, if not cash,” an anonymous government official was quoted as saying.

Questions sent to Sarvam and the Ministry of Electronics and Information Technology (MeitY) remained unanswered till the time of publishing this story.

Earlier this month, Sarvam announced raising $234 Mn as part of a larger ongoing $300 Mn round. The round was led by HCLTech, which invested $150 Mn for a 10.46% stake, and also saw participation from Bessemer Venture Partners, Khosla Ventures and Peak XV Partners.

The round valued Sarvam at $1.5 Bn, making it the country’s 130th unicorn. According to this valuation, the government’s reported stake could be valued at $1.5 Mn to $3 Mn.

Sarvam is among a handful of AI-focused startups chosen as part of the IndiaAI Mission to build indigenous, multilingual and domain-specific foundation models. These include Soket AI Labs, Gnani.ai, Gan.AI, BharatGen, Tech Mahindra, Fractal Analytics, Avataar.ai, ZenteiQ Aitech Innovations, Genloop Intelligence, NeuroDx and Shodh AI.

Under the programme, the selected startups are being offered access to GPU compute at a subsidised rate, with the government covering 40% of the cost.

Sarvam is one the largest beneficiaries of the allocation, receiving ₹98.68 Cr against a total compute bill of ₹246.71 Cr, covering access to 4,096 Nvidia H100 GPUs for six months.

The broader programme is designed to strengthen India’s domestic AI capabilities by backing homegrown model builders and easing access to expensive compute infrastructure.

However, the government’s move to provide support in return for a place on startups’ cap tables has raised some concerns. ET reported in January that several startups pushed back against the proposal, favouring a more flexible, grant-based approach to foster indigenous AI development without diluting ownership.

Founded in 2023 by Pratyush Kumar and Vivek Raghavan, Bengaluru-based Sarvam builds AI models, infrastructure and enterprise products. The startup operates across language, speech, vision and document AI, serving customers in sectors such as banking, insurance, government and defence.

Sarvam’s FY26 revenue, as per unaudited financials shared by HCLTech, stood at ₹45.1 Cr. This represented a multifold jump from ₹1.5 Cr revenue in FY25. The IT giant’s investment in Sarvam is the largest by an IT firm in the Indian AI startup ecosystem.

The capital will fuel Sarvam’s research on its next-generation frontier models, particularly for agentic AI, coding and cybersecurity use cases. A part of the capital has also be earmarked to secure large-scale computer infrastructure, as it expands deployments across enterprises and government organisations.

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