Google and Accel Team Up to Fund and Accelerate Indian AI Startups

According to top executives at the firms on 20 November, Alphabet's Google and venture capital company Accel will collaborate to finance a minimum of ten early-stage Indian AI startups. This will be the first time the U.S. tech giant has done so. The action comes as a number of American tech companies, including Microsoft, Amazon, and OpenAI, are aiming for the most populous country in the world, which is regarded as a crucial growth market with around a billion internet users.

Prayank Swarop, a partner at Accel, told Reuters in an interview that the cooperation will see Google's AI Futures Fund and Accel co-invest up to $2 million in each business, with the investments concentrated on the broad domains of work, code, creativity, and entertainment.

Commenting on this development, Dipal Dutta, CEO at RedoQ stated, "The joint initiative by Google and Accel will provide Indian innovators with a combination of finance, infrastructure, and global mentorship. The selected startups will gain seed funding and direct access to cutting-edge tools like Google Cloud compute credits and proprietary models such as those from Gemini and DeepMind. The co-investment of up to $2 million per selected pre-seed startup, with Google's AI Futures Fund matching Accel's investment, is significantly higher than typical seed funding in India. Technical support will also be equally important, as a lack of large-scale computing power has historically been a bottleneck for deep-tech AI ventures in India."

Echoing similar sentiments, Yashraj Bhardwaj, Co-Founder and COO of Petonic AI said, "This announcement comes at a time when Indian AI startups are moving from experimentation to real-world deployment.This is a major boost for the Indian AI landscape, especially for early-stage founders who often struggle with access to capital, compute infrastructure, and credible mentorship. Today, training sophisticated AI models requires significant GPU resources, and the cost of experimentation alone can slow down innovation. With this funding and access to advanced cloud and AI tools, Indian startups will be able to build, test, and iterate far more rapidly. What excites me most is the combined strength of capital plus capability. Funding gets startups off the ground, but pairing it with technical guidance, early access to frontier models, and mentorship from global experts gives Indian founders a genuine competitive edge. It levels the playing field with startups in more mature AI markets."

However, moving towards the closer dynamics of this deal, Bruce Keith, Cofounder, InvestorAi opined, "The more interesting question will be what type of AI they are looking to back – something that is built on top one of the existing large US LLM providers or a vertical AI offering that has its own foundational models and has been designed with deep domain expertise. It is the latter where real value will lie through differentiation and a focus on outcomes. With China largely locked out from American corporates, it is little wonder that they are looking for ways to take strategic stakes in the onrushing Indian AI growth story."

Google’s Future Plans for Data Centres

The move follows Google's statement in October that it would make its largest-ever investment in the nation, investing $15 billion over five years to establish an AI data centre in the southern Indian state of Andhra Pradesh. Since its founding six months ago, the AI Futures Fund has provided funding to more than thirty businesses, including the U.S.-based legal-tech company Harvey and the Indian webtoon startup Toonsutra.

Additionally, Google and Reliance Jio, the biggest telecom provider in India, have partnered to give 505 million users free access to Gemini AI. According to Jonathan Silber, co-founder and director of Google's AI Futures Fund, the company is certain that its Indian creators will be essential in shaping the future of global technology. The business believes that early investment is crucial. In order to be at the forefront of investing in the future generation of AI leaders, especially in important areas like India.

Sanjay Sehgal, Founder, Chairman & CEO, Aziro said, "The collaboration between Google and Accel to accelerate Indian AI startups marks a defining moment for India’s innovation landscape. As someone who has witnessed India’s technology journey evolve over the decades, this initiative signals a new era in which our entrepreneurs are not just participants but pioneers in the global AI revolution. This partnership brings together two forces with unmatched expertise in technology and venture building. For India’s founders, it unlocks access to world-class mentorship, cutting-edge AI infrastructure, and catalytic capital that can transform ambitious ideas into industry-shaping companies."

Agreeing to Sehgal, Mohan Prasad, Business Head, ShepHertz said, "The partnership between Google and Accel is going to be a turning point for AI in India—not only because of the money but also as a driving force for the whole system to change. As technology, business, and society’s stakeholders, this unison is offering a chance to speed up home-grown AI innovation. By investing in very early-stage AI startups, this initiative will empower founders with resources to create products that are scalable and can compete globally. More than funding and cloud credits, the coming together of two industry stalwarts is about creating an infrastructure—technical, financial, and cultural—that encourages risk-taking, creativity, and long-term thinking."

India’s AI Sector

IT industry association Nasscom and consultancy firm BCG predict that India's AI business will grow to $17 billion by 2027. According to industry research firm Gartner, global AI spending is expected to reach around $1.5 trillion in 2025 and surpass $2 trillion in 2026. Days have passed since Accel and Prosus partnered to co-invest in Atoms X, supporting early-stage Indian entrepreneurs developing large-scale solutions that might benefit the nation's masses.

According to Silber, Google is not setting up the collaboration as a means of acquiring more businesses or even gaining cloud clients in the future, as reported by TechCrunch. According to him, the company does not actively seek out new cloud clients because it is not a sales force. That is not Google's objective. Its goal in terms of KPIs is to simply identify the next wave of AI innovation emerging from India.