Private Equity (PE) funding in the domestic artificial intelligence (AI) startups has tripled since 2024, having potential to add significantly to market capitalisation in the listed AI space in the next two to five years, a Goldman Sachs report today said.
The report titled India AI Complex, Part 2: The Rise of Private AI Contenders, Widening the Opportunity Set, said the funding flow is likely to add incremental market capitalisation of about $50 billion to $100 billion to India’s listed AI complex via IPOs in the next two to five years.
This pipeline, according to the report, will be led by upstream AI enablers and downstream AI Adopters, and would see currently underrepresented AI pockets. In the part one of the report, Goldman Sachs identified a cohort of listed AI Enablers, with a combined market cap of US$670bn, which have delivered India’s strongest equity returns in 2026 to date.
“This cohort is built primarily around AI infrastructure, spanning power generation, semiconductors, and data centers,” the report said.
“Capital allocation to AI is accelerating rapidly, and where we see a maturing pipeline of companies, signaling potential to widen the breadth of India’s listed AI opportunity set in the coming years,” the report pointed out.
“PE funding for Indian AI startups has tripled since 2024, with AI’s share of total PE allocation rising four-fold to reach approximately one-fifth of all private capital deployed in India. India now ranks among the top six global destinations for private AI funding and the top four for newly-funded AI companies, per Stanford University’s 2026 AI Index Report, challenging a broad perception that India remains peripheral to the global AI buildout,” the report said.
How many companies have been identified in the cohort?
The report identified 84 “Private AI Contenders”. “A cohort for which we estimate current value at approximately $55bn, accounting for approximately 40% of all AI-related private capital raised in India since 2025,” it said.
“These companies span the full AI value chain, from Upstream AI Enablers building foundational infrastructure, to Midstream AI Core Engines conducting core model research and development, to Downstream AI Adopters applying AI/ML across end-markets and range from early stage to mid-to-late-stage companies,” it added.
What opportunity does it offer to the retail investors?
The report suggests that with the widening base of PE investments in the AI startups there will be a good pipeline for the investors in the next five years.
“We estimate approximately $50bn to $100bn in incremental market cap could be added to India’s listed AI complex from prospective IPOs over the next 2-5 years, assuming 25-50% of the 70 mid-to-late-stage Private AI Contenders (currently estimated at 54bn value) list at a weighted average 4x valuation step-up,” it added.
“While this remains modest relative to the $670bn listed AI Enablers cohort from Part 1, the more important shift is qualitative: this pipeline, led by Upstream AI Enablers and Downstream AI Adopters, would introduce currently underrepresented AI pockets, including data center operators, enterprise AI services, conversational AI, cloud and data management services, healthcare AI, and computer vision, among others, into India’s listed markets,” it said.