According to a Bank for International Settlements (BIS) working paper, India ranks seventh globally by aggregate AI-firm valuation, ahead of the UK and Canada but behind Japan (26), the UK (40), and Israel (42). The study, titled 'The Geography of AI Firms', maps 1,246 AI-producer firms across 32 economies, each valued at more than $500 million. The dataset was built using PitchBook data screened by a large language model and manually verified, with firms classified into five layers: compute, cloud and related infrastructure, data tools, AI models and applications.
As reported by the BIS study, almost all of India's AI-firm valuation sits in the cloud and infrastructure layer, largely due to classifying information technology services majors such as Wipro and HCL Technologies in this category. The authors note this interpretation is debatable, as these companies' businesses resemble systems integration and cloud consulting rather than cloud platform operation. India has negligible valuation in AI models and only a thin presence in compute infrastructure. The composition reveals India's limited presence across the AI supply chain beyond basic IT services.
According to the BIS analysis, AI firms accounted for less than 6% of total listed-company revenue in India in 2024, compared to roughly 13% in the US and Korea. Their share of capital expenditure was below 5% and had barely moved since 2010. India is an outlier in investment behavior, being one of only three economies along with Canada and Sweden that does not show significant home bias. Indian AI firms direct 41.7% of their investment deals towards US-based targets against 27.9% domestically. The study also found that firms founded after 2012 make up 27% of the count but only about 2% of the valuation.
As reported by the BIS study, India, along with Japan and the US, is one of three economies where most deals do not remain within the investor's own supply-chain layer, suggesting that Indian AI firms buy capabilities rather than reinforce them. Applications accounted for 52.6% of Indian deals and infrastructure for 15.5%. The paper's regressions found that venture-capital inflows, rather than bank credit, correlate with both the presence and number of AI firms in an economy, with bank lending being collateral-based and ill-suited to young, intangible-heavy firms.
