Karnataka Sets Aside INR 600 Cr To Bolster Deeptech, AI Innovation

The Karnataka government has announced an INR 600 Cr plan to back entrepreneurs building technologies in areas of artificial intelligence (AI), machine learning (ML), quantum computing, robotics, advanced manufacturing, and sustainability-focussed innovation.

In a statement, the minister of electronics, information technology & biotechnology, Priyank Kharge, said that the initiative aims to strengthen the state’s deeptech startup ecosystem and make Karnataka the ‘deeptech capital of India’.

As part of the plan, INR 150 Cr will go into a new DeepTech Elevate Fund, which will focus on AI and frontier technologies. Another INR 80 Cr will be channelled via the Elevate Beyond Bengaluru Fund to promote startups in Mysuru, Mangaluru, Hubballi-Dharwad, and Kalaburagi.

The government will also invest INR 75 Cr through the Karnataka Information Technology Venture Capital Fund (KITVEN). With this, the state government plans to provide equity funding between INR 50 lakh and INR 2 Cr to AI and deeptech startups.

In addition, INR 48 Cr will be used to set up new incubators and accelerators at IIT and IIIT campuses in Dharwad and Kalaburagi.

As much as INR 110 Cr has been allocated to support seed-level innovation across 11 institutions in the state.

Kharge said the government is also exploring an INR 200 Cr fund-of-funds and a co-investment model with venture capital firms to ensure a steady capital flow for startups.

With VC participation, the total fund strength could reach INR 1,000 Cr, dedicated entirely to AI and deeptech ventures in the state.

The new investment plan adds to a series of moves by the Karnataka government to strengthen its position as India’s leading innovation hub.

In March 2025, the state announced plans to develop the MV Deep Tech Park at Jangamakote in Chikkaballapur district to support high-tech industries such as spacetech, semiconductors, drones, electric vehicles, aerospace, and defence. The park aims to bring together research, manufacturing, and startup innovation under one roof.

At the time, Kharge said Karnataka was already home to over 250 deeptech startups, employing nearly 10,000 people.

The government has also outlined plans for a startup park in Hubballi, an economic corridor in Dharwad, and industrial hubs in Vijayapura and Kalaburagi.

In August 2025, chief minister Siddaramaiah launched the INR 1,000 Cr Karnataka Quantum Mission, targeting a $20 Bn quantum economy by 2035.

The initiative aims to create 10,000 high-skilled jobs and establish the state as the ‘Quantum Capital of Asia’.

It includes the creation of India’s first Quantum Hardware Park, four innovation zones, and a dedicated Quantum Venture Capital Fund to back over 100 startups in the sector.

The state is also setting up a Centre for Applied AI for Tech Solutions (CATS) with an investment of INR 50 Cr and has introduced the Karnataka Clean Mobility Policy 2025–30, which aims to attract INR 50,000 Cr in investments across the clean mobility value chain.

Notably, with 76 funding rounds in the third quarter of 2025, Bengaluru startups raised a total of $617 Mn in funding, as per Inc42’s data.

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