Indian artificial intelligence startups raised 438 million dollars in the third quarter of 2026. The figure is 265 per cent higher than the same period last year. There were 35 funding deals in the quarter, according to data from Inc42.

The biggest deal was Emergent’s 130 million dollar round. The round valued the company at 1.5 billion dollars, making it India’s newest AI unicorn. Total AI funding in the first nine months of 2026 touched 1.1 billion dollars.

Investors are betting on startups building AI tools for businesses. Sectors like customer support, coding and healthcare are seeing the most action. However, 63 per cent of investors surveyed said they see froth in AI valuations.

Analysts said the boom mirrors the global AI rush. They warned that only startups with real revenue will survive when funding slows. Founders were advised to focus on unit economics over growth at any cost.

The report said early-stage deals made up most of the quarter’s activity. Investors expect the pace to hold through the December quarter as AI adoption spreads.