AI-driven biotech growth within India’s funding surge

India Emerges as a Global Hub for AI-Driven Biotech Innovation Amid Funding Surge

India is rapidly establishing itself as a major player in the global landscape of AI-driven biotechnology, fueled by a wave of unprecedented investments and strategic funding commitments. This convergence of capital, talent, and innovation is transforming India into a fertile ground for breakthroughs in drug discovery, protein engineering, and biotech infrastructure, positioning the country at the forefront of the next wave of biotech evolution.

A Funding Boom Driving Biotech and AI Synergy

Recent developments highlight a significant surge in both sector-specific and country-focused funding initiatives:

• Large-scale funds dedicated to India’s AI ecosystem are making waves. Notably, Peak XV (formerly Sequoia India) announced the closing of $1.3 billion specifically for AI investments across India and the Asia-Pacific, targeting sectors such as healthcare, agriculture, and enterprise tech. This substantial capital pool underscores investor confidence in India’s burgeoning AI and biotech startups.

• International giants are pledging billions to bolster India’s AI infrastructure, exemplified by Microsoft’s announced $50 billion investment plan aimed at expanding AI research, deployment, and infrastructure access across India and the Global South. Such commitments help accelerate the development of AI-enabled solutions in healthcare, manufacturing, and other critical sectors.

• Major private equity and venture funds are also stepping in. Blackstone’s recent participation in Neysa’s $600 million equity raise, subsequently expanded with an additional $1.2 billion, exemplifies strategic investments in AI infrastructure companies. These large bets are designed to propel India’s AI capabilities and industrial adoption at scale.

Innovative Startups and Sector Highlights

India’s startup ecosystem is thriving, with AI-driven biotech startups drawing notable funding:

• Peptris, a Bengaluru-based biotech startup specializing in AI-enabled drug discovery, recently secured INR 70 crore (approximately $7.7 million) in a Series A round co-led by IAN Alpha Fund and Speciale Invest. Peptris’s platform leverages AI algorithms to significantly cut down R&D timelines and costs, exemplifying how India is leveraging AI to leapfrog traditional biotech hurdles.

• Galux, a South Korean startup with a growing presence in India, announced a $29 million funding round to advance AI-driven protein design. This investment underscores the global momentum behind AI-powered biologics and therapeutic development, with India positioned as a key nexus for such innovation.

The Broader Investment Landscape and Sectoral Growth

The overall VC investment landscape in 2025 reflects a global and domestic confidence in AI’s transformative potential:

• AI venture capital funding has soared to approximately $211 billion in 2025, representing nearly half of all global VC investments. This enormous influx underscores AI’s central role in future technological breakthroughs, including biotech applications such as personalized medicine and gene therapies.

• The rise of sector-specific AI funds, like FutureFirst’s $50 million fund dedicated to vertical AI startups in biotech, healthcare, and industrials, highlights a strategic shift toward targeted support. These funds aim to address sector-specific challenges and accelerate commercialization.

Implications for India’s Biotech and AI Ecosystems

This capital infusion is catalyzing rapid advancements:

• Drug discovery pipelines are accelerating, with AI platforms enabling faster target identification, preclinical testing, and clinical trial design.

• Protein engineering efforts are becoming more precise, facilitating the development of personalized therapies and biologics.

• Infrastructure development—such as AI-enabled manufacturing and data management—is gaining momentum through large investments like Neysa’s expansion, creating a robust foundation for scalable biotech solutions.

Moreover, India’s growing AI talent pool is attracting strategic hires and fostering cross-border collaborations, further fueling innovation.

Looking Ahead into 2026 and Beyond

Industry experts predict this momentum will continue into 2026, with sustained investments and strategic initiatives:

• Ongoing funding will further reduce R&D timelines, enabling faster deployment of novel therapeutics and biotech products.

• India’s position as an AI-biotech innovation leader will solidify, attracting global partnerships, research collaborations, and ethical AI deployment standards.

• The integration of AI into biotech will lead to revolutionary breakthroughs in medicine, industrial biotech, and biological sciences, transforming health outcomes and industrial processes.

In summary, India’s emergence as a major hub for AI-driven biotech innovation is powered by record-breaking investments, strategic funding from both domestic and international players, and a vibrant startup ecosystem. Large funds like Peak XV’s $1.3 billion and Blackstone’s $1.2 billion investment in infrastructure companies, alongside sector-specific initiatives, are laying the groundwork for a future where AI accelerates drug discovery, enhances protein engineering, and builds resilient biotech infrastructure. As these trends continue, India stands poised to lead transformative breakthroughs that will shape the global biotech landscape for years to come.