Uttar Pradesh chief minister Yogi Adityanath’s announcement of a ₹25,000 crore memorandum of understanding (MoU) with artificial intelligence (AI) startup Puch AI has drawn sharp online criticism over the company’s credentials, prompting clarifications from both sides and a defined due diligence process from the state’s investment arm.
“Puch AI had given a proposal to us on Friday, and we signed a non-binding MoU with them on Monday. We have asked them to submit due diligence documents and they have been given three days to do so. If they pass this due diligence process, we will go ahead with them; otherwise, we will cancel the MoU,” Invest UP CEO Vijay Kiran Anand told HT.
Describing the company as a bootstrapped startup, Anand said the ₹25,000 crore figure represents private investment that Puch AI would mobilise through its investors. “Our job is to facilitate in terms of land, policy support, ecosystem-based support, manpower and clearances,” he said. The government has earmarked land for an AI city and AI park, with the expectation that other companies could join the ecosystem.
Bhatia, separately, said the company is “well-funded” and not bootstrapped, while declining to share financial details. On the investment itself, he confirmed the structure as a public-private partnership. “It does not involve any cost to the taxpayers of Uttar Pradesh. On the contrary, it brings investment into the state. The project will be executed in phases, with support from external investment partners. We have not taken any money, any GPUs, or any other form of support from the Government,” he said.
Founded roughly a year ago, Puch AI offers a voice-first AI service via WhatsApp. Critics in the tech community dismissed the product as a “wrapper” built atop existing AI models, pointing specifically to Google’s Gemma family. Bhatia acknowledged the company does not have its own foundational model, but said it has built its infrastructure on open-source models tailored for Indian users, rather than relying on commercial APIs from firms such as OpenAI or Anthropic.
Assistant professor of computer science at Bengaluru’s Indian Institute of Science (IISc), Danish Pruthi, told HT, “There are no open-source models, no blogs, no reports, no publications—nothing that could be verified or audited by independent parties.”
Pruthi also said the company had “absolutely no experience or expertise in building data centres or setting up universities,” and pointed to what he described as “viral marketing stunts”—including being a top-tier sponsor for Lionel Messi’s India tour and bidding to acquire Perplexity.
Adityanath had announced the MoU on X on Monday, positioning it as a push to build AI infrastructure, including AI parks, data centres, an AI Commons and an AI University. He subsequently clarified that such agreements are preliminary. “An MoU by Invest UP is a preliminary step before detailed due diligence and project evaluation gets done… MoUs are non-binding on the State Government,” he said, adding that proposals could be terminated if they fall short.
Bhatia, who has met senior Union ministers including defence minister Rajnath Singh and commerce minister Piyush Goyal earlier this month, has been actively building the company’s public profile. In August 2025, following OpenAI’s expansion into India, he posted a Times Square message addressed to Prime Minister Narendra Modi: “Why applaud OpenAI expanding in India? Let’s celebrate Puch AI coming to New York,” alongside the hashtag #AatmaNirbharBharat.
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