Can Bhavish Aggarwal Drag Ola Krutrim Out Of The Rut?

In June 2023, on a visit to India, OpenAI cofounder and CEO Sam Altman said Indian startups looking to build ChatGPT rivals with just a few million dollars will most likely fail. Ola Consumer and Ola Electric founder Bhavish Aggarwal responded saying an Indian company will one day prove him wrong. 

Aggarwal, who has openly criticised tech giants in the past, rejected the idea that India could not build foundational AI models that ChatGPT relied on. 

In the following weeks and months, Aggarwal set about incorporating Ola Krutrim, raised funds from long-time Ola investor Matrix (now Z47) and positioned it as India’s own sovereign LLM. Krutrim became a unicorn almost exactly one year after Altman had said Indian startups could not compete. 

In early 2024, the startup raised $50 Mn in funding at a $1Bn valuation to become the third unicorn under Aggarwal’s belt. 

Aggarwal is usually bullish about every new launch in the Ola family, but many would say that Ola Krutrim was his grandest vision. 

He spoke assuredly about building India centric AI models trained on local languages and datasets. The startup even announced plans for launching indigenous AI chip, its own cloud stack, and also unveiled consumer AI assistants, and marketed itself as a full stack AI ecosystem. Even if some of these claims had been called out by many, including us, at the time. 

But less than two years later, as things stand, much of that original vision appears to have unravelled. 

Krutrim has paused work on its ambitious LLM and semiconductor initiatives, recently pulled the plug on its consumer chatbot Kruti, and has seen several senior level exits. 

Sources say that the company has gone from more than 550 employees in August 2025 to roughly 150-160 as of March 2026. 

And amid all this churn, Krutrim announced a sharp pivot toward AI cloud infrastructure services.

Sources told Inc42 that Aggarwal is currently calling the shots at Krutrim, and is supported by Navendu Agarwal, an SVP and head of business, along with Raguraman Barathalwar, CTO and VP of engineering, and Sheetal Chittawar, director of the silicon strategy division at Krutrim.

This marks one of the most dramatic resets in the Indian AI ecosystem and raises questions such as whether Ola Krutrim, which was positioned as India’s most high-profile sovereign AI bet overpromised and underdelivered. And where do Aggarwal and Krutrim go from here given that AI still holds great prominence in the wider industry and for the Indian economy?   

Questions sent to Krutrim did not elicit a response at the time of publication.

From AI Dreams To India First AI Unicorn

Aggarwal launched Krutrim at a time when generative AI had become the defining technology race globally. 

OpenAI had triggered the boom with ChatGPT, and raised billions to set off the AI arms race. Google, Anthropic, Meta, Perplexity and Mistral had already poured billions into foundation models, but OpenAI was one of the first out of the fate. 

Meanwhile in India, there were barely any serious contenders attempting to build LLMs or frontier models. 

Aggarwal saw a clear opportunity. 

Krutrim positioned itself as an “India-first” AI company focused on Indic languages, cultural context and sovereign infrastructure. The argument was that global AI models were disproportionately English-centric and poorly optimised for India’s linguistic diversity. 

Its technical paper even claimed the company had trained multilingual AI systems on massive Indic datasets to address that imbalance. The timing also favoured Krutrim. 

In January 2024, Krutrim not only became the first unicorn of the year, but also the first AI unicorn in India. 

The narrative also aligned with India’s growing push for sovereign technology infrastructure. Policymakers had started emphasising the requirement for indigenous AI capabilities. All this is coming to the fore now, but Ola Krutrim seems to be curbing its ambition and enthusiasm. 

Did Krutrim Take On Too Many Things Too Fast?

Within months of raising its first round, Krutrim had expanded into multiple verticals simultaneously. 

The startup announced proprietary LLMs, AI assistants, enterprise AI tools, cloud infrastructure services and semiconductor initiatives. Besides, the company even acquired Bodhi Computing, a Bengaluru-based AI startup focused on chip design in 2023. 

The semiconductor initiative later gained visibility after Krutrim announced in August 2024 that it would launch GPUs for AI applications by 2027.

But each of those businesses independently requires enormous capital, specialised talent and long execution cycles. 

Building competitive LLMs demands massive GPU infrastructure and world-class AI researchers. Semiconductor design is even more expensive and technically demanding. AI cloud infrastructure requires consistent enterprise demand and large scale compute deployment. 

Instead of focusing on one clear product category, Krutrim appeared to be chasing several parallel ambitions at once. The strategy stretched the company too thin. 

Cracks Emerge In The AI Story

However, by mid to late 2025, issues started emerging internally. The Ola Krutrim story, which was front and centre in the AI space in India till then, took a backseat as new LLM makers emerged. Sarvam AI picked up the baton after raising its first major round and was soon able to capitalise on this. 

Krutrim on the other hand stumbled from one problem to another. 

First, the company witnessed several senior level exits across its AI and semiconductor divisions. Key leaders who were tasked to drive the company including Sambit Sahu, cofounder of Bodhi Computing, Sunit S, a senior product leader and Chandra Khatri, founding head of AI. 

Many other mid-management executives and engineers also exited during the company’s restructuring drive, and there was tremendous amount of pressure on the team at Ola Krutrim to make inroads in AI and prove that an Indian company can stand up to Silicon Valley tech giants. The company’s allegedly toxic work environment was routinely called out, and the death by suicide of an Ola Krutrim engineer in May 2025 amplified these concerns.  

The layoffs in recent months are a result of these series of challenges that Ola Krutrim faced in scaling up. Some of them are due to the company’s retreat from AI verticals, and others were laid off ahead of the recent transition to a cloud services company.  The most recent layoffs at Krutrim impacted AI research, linguistics and semiconductor teams as the startup recalibrated its focus.

Employee count also dropped from more than 550 in August 2025 to nearly 150-60 employees by March 2026. Ola Krutrim declined to comment on these exits and layoffs.

The reports of a high attrition rate are significant because deeptech and AI startups rely heavily on highly specialised talent pools and often a huge part of their overall expense goes towards paying the high salaries that such specialised talent demands. And in this regard, Krutrim seemed to be slipping behind the competition.

While AI-native hiring shot up in India in 2025, Krutrim went through a churn and a high attrition phase. In contrast, the likes of Sarvam, Corover, Gnani and other LLM makers in India have grown in team strength as well as prominence, and have also begun work under the ambit of the India AI Mission to build sovereign AI. 

The Semiconductor Dream

The startup’s semiconductor dream was one of the boldest. Aggarwal has time and time again reiterated that India needs to reduce dependence on foreign AI infrastructure and develop indigenous computer capabilities. 

The acquisition of Bodhi Computing, a startup founded by former Intel veterans, was meant to accelerate Krutrim’s semiconductor plans. 

But semiconductor development is among the most capital intensive industries across the world, and India does not have the necessary infrastructure to truly become a semiconductor manufacturer like China or Taiwan. 

It was around this time that Krutrim was burning around $4 Mn – $5 Mn on a monthly basis as per media reports. To further fuel the company’s growth, Aggarwal even pledged his shares in Ola Electric to raise debt tied to Krutrim’s operations. 

Today, Krutrim’s system-on-chip (SoC) division seems to have been effectively dismantled, with the majority of the workforce from Bodhi Computing having exited, as per sources. 

“He (Bhavish) never focused on one thing at a time, he made multiple pivots at Krutrim,” said one of the sources aware of the daily operations. This not only resulted in capital expenditure but also created a lot of confusion for the team.

Announcing sovereign AI ambitions is one thing. Building foundational infrastructure across models, chips and cloud services simultaneously is another entirely. 

Kruti’s Quiet Exit

Another sign of Krutrim’s shifting priorities was the disappearance of Kruti. Launched almost a year ago, Kruti was positioned as a real-world agent and chat bot for tasks such as booking cabs, ordering food and completing multi-step workflows through voice prompts. 

It was a showcase for Krutrim’s LLM prowess and Aggarwal routinely praised its capabilities in comparison to established LLMs..

But over time, the product’s visibility faded. One indication of this was seen during the Impact India AI Summit, where there was barely mention of Ola Krutrim across the five days. While the likes of Sarvam shared the spotlight with OpenAI’s Altman, Google CEO Sundar Pichai, Anthropic CEO Dario Amodei and others, Krutrim and Aggarwal were nowhere to be seen. 

Today, Kruti’s website and app infrastructure have stopped functioning, signalling that the company is deprioritising consumer AI products altogether. 

It is a known fact that consumer AI products remain difficult to monetise at scale. Especially when trying to compete against the likes of OpenAI, Google, and Meta. This would require constant model upgrades, massive compute spending and sustained user acquisition investments even in the face of rapid monetisation.

AI Cloud: The Final Pivot? 

Krutrim today looks very different from what was originally promised. 

Instead of competing directly at the frontier and foundational layers, the startup is increasingly focusing on AI cloud infrastructure services and enterprise commute services. 

The shift is pragmatic but it takes Krutrim away from the value-creation layer of AI and puts it among the companies looking to provide cloud services to AI giants. Enterprise AI infrastructure offers clearer monetisation opportunities through GPU compute services, inference infrastructure, and deployment tooling. 

Now it needs to be highlighted that Krutrim had already been offering AI cloud infrastructure, so essentially this new focus hints at the company shelving its other projects. 

The company’s cloud infra managed workloads for the Ola group of companies, including Ola Electric, with Ola Consumer expected to migrate as well. 

But this has earlier raised concerns that the cloud business has limited external enterprise traction outside Ola’s own network and their subsidiaries. The startup’s FY25 financial report further supports these claims. Almost 90% of the startup’s total revenue (INR 101.7 Cr) came from Ola Group companies. 

Today, Krutrim claims it is working with more than 25 enterprise clients across sectors like mobility, fintech, and ecommerce, though it has not yet named any new customers. 

One founder who has used Krutrim’s cloud services told us: “They were too ambitious before they had enough depth in their product. They took a bottoms-up approach, first developers then enterprises, which is why the ambition didn’t land as it could have.” 

The person further goes on to say that competing against players such as Microsoft Azure, AWS and Google Cloud with their deeply entrenched customer bases, would be hard for Krutrim. There’s also no direct incentive for any company or enterprise in using the cloud services except as a cost-savings move in the early stages of deployment. 

The scale afforded by rivals is unmatched by the company. 

Two years after Bhavish Aggarwal challenged Sam Altman’s scepticism about India’s ability to build ChatGPT-like models, players such as Sarvam and Gnani.ai have proven that it can be done. 

Krutrim seems to have lost all its momentum. Can Bhavish Aggarwal take his AI company out of this rut? 

With inputs from Ankush Das & Lokesh Choudhary
Edited by Nikhil Subramaniam

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