Uttar Pradesh Chief Minister Yogi Adityanath announced that the state has signed a Rs. 25,000 crore Memorandum of Understanding with Puch AI to build a comprehensive AI ecosystem. The agreement outlines plans to establish AI Parks powered by large-scale data centre infrastructure, an AI Commons platform for citizen and governance applications, and a dedicated AI University for training tech talent. A 40-acre plot near the Lucknow airport has been identified as the site for what is being called India's first AI City, with Noida, Kanpur, Varanasi, and Prayagraj also part of the broader plan.
What Is Puch AI?
Puch AI is a Bengaluru-based startup founded in 2025 by Siddharth Bhatia and Arjit Jain, focused on making AI accessible to everyday Indians. The platform operates primarily through WhatsApp and voice calls, offering free services such as chat assistance, image and video generation, and fact-checking, with a strong emphasis on regional languages. Over a million Indians currently use Puch monthly, with more than 60 percent experiencing AI for the first time, many in their native languages using voice notes.
A Rs. 25,000 crore deal for a Rs. 42.9 lakh revenue company?
The deal has drawn sharp criticism from the Indian startup and investor community. Puch AI's annual revenue stood at just Rs. 42.9 lakh as of March 31, 2025, making the Rs. 25,000 crore MoU nearly 6,000 times larger than its annual earnings. The company has raised no external funding to date, and critics point to its small team and lack of any infrastructure track record as fundamental red flags for a commitment of this scale.
The scepticism is also fuelled by Bhatia's history of headline-chasing stunts. In August 2025, he announced a $50 billion unsolicited offer to acquire Perplexity AI and Google Chrome, despite Puch AI being valued at just $50 million at the time. Anyone wishing to participate in the deal was asked to email perplexity@puch.ai, with the first person to convince Perplexity's CEO winning an iPhone. The post went viral, but was widely read as a publicity stunt rather than a serious business move.
The internet has reacted to this announcement with a mix of humour and astonishment.
After backlash, Adityanath was quick to make a u-turn. "An MoU by Invest UP is a preliminary step before detailed due diligence and project evaluation gets done. The MoU with Puch AI is similarly an initiation of the process by Invest UP to explore potential in the AI sector. MoUs are non-binding on the State Government. Any further progress including any Government permission, approval or license is subject to detailed evaluation of prospective investors proposal . Any prospective investor falling short of the above will automatically have their MoU terminated. Uttar Pradesh remains committed to transparent, responsible, and future-focused development," he said.
