Krutrim, Indian AI Unicorn, Shifts to Cloud

Krutrim Shifts Focus to Cloud Services

Krutrim, the first Indian company to achieve unicorn status in the field of generative artificial intelligence, has recently announced a major strategic shift. After a period of silence regarding its products, the company has decided to focus on cloud services. This turnaround highlights the economic difficulties faced in creating large-scale AI systems.

A Strategic Reorientation in 2025

On Tuesday, Krutrim revealed its intention to pivot towards cloud services, a decision stemming from a restructuring of its operations at the end of 2025. This reorganization involved reallocating financial and human resources, as well as pausing chip development. This announcement comes more than a year after the launch of its flagship model, Krutrim-2, by the Bengaluru-based startup.

Public Silence and Lack of Major Events

In recent months, Krutrim has been quiet on the public scene, with no notable product announcements. Its last message on platform X dates back to December, and it did not participate in the AI Impact Summit in New Delhi. This event, however, featured major names like Anthropic, Google, and OpenAI.

Active Competition from Sarvam

Meanwhile, Sarvam, a direct competitor, has been very active during this six-day summit. It showcased new open-source models, hardware advancements, and business partnerships, thereby strengthening its market position.

Workforce Reductions and Product Withdrawals

Krutrim has also gone through a tough period with several waves of layoffs, cutting more than 200 positions over the past year. In April, the startup removed its AI assistant app, Kruti, from app stores, marking another turning point in its strategy.

Origins and Ambitions of Krutrim

Founded by Bhavish Aggarwal, who also heads the ride-hailing company Ola and electric vehicle manufacturer Ola Electric, Krutrim initially positioned itself as a pioneer of generative AI in India. It aimed to create local alternatives to models developed by giants like Anthropic, OpenAI, and Elon Musk's xAI. In January 2024, Krutrim raised $50 million, reaching a valuation of $1 billion, reflecting investor enthusiasm for Indian ambitions in AI.

Financial Performance and Dependence on Ola

For the financial year 2026, Krutrim announced revenues of approximately ₹3 billion (around $31.52 million), tripling its figures from the previous year. The startup recorded its first annual net profit with margins exceeding 10%. However, it did not specify the share of these revenues coming from external clients versus those generated within the Ola ecosystem. Previous reports indicated that 90% of its revenues in FY25 came from group companies.

Growing Demand for Cloud Services

Krutrim has observed increasing demand for its AI cloud services, with over 25 client companies across various sectors such as telecommunications, financial services, and healthcare. Most of its GPU computing capacity is already committed to external workloads, underscoring the appeal of its cloud offerings.

Expert Opinions on the Strategic Pivot

Sanchit Vir Gogia, chief analyst at Greyhound Research, commented that the shift to cloud is a commercially wise decision. However, he emphasized that Krutrim's claims of profitability require rigorous verification. "The level of proof must increase with the claim," he told TechCrunch.

Competition and Partnerships in AI

As Krutrim focuses on cloud infrastructure, its competitors like Sarvam continue to develop new AI models and sign strategic partnerships, including with Pixxel, a space technology company, to create an AI-powered orbital data center.

Future Prospects for Krutrim

As Gogia pointed out, cloud infrastructure could be the most viable short-term choice for Krutrim in the Indian AI market, although the ambition to develop competitive models in the long term remains. Krutrim has not responded to inquiries regarding the exact composition of its revenues, its enterprise client base, and its recent restructuring.