Announcement by Uttar Pradesh Chief Minister Yogi Adityanath $A Rs 25,000-crore Memorandum of Understanding (MoU) with AI startup Puch AI has sparked sharp criticism online over the company’s credentials, leading to clarifications on both sides and a specific due diligence process from the state’s investment arm.
“Puch AI submitted a proposal to us on Friday, and we signed a non-binding MoU with them on Monday. We have asked them to submit due diligence documents and have been given three days to do so. If they pass this due diligence process, we will go ahead; otherwise, we will cancel the MoU,” Vijay Kiran Anand, CEO, Invest UP, told HT.
Anand described the company as a startup, and said $The Rs 25,000 crore figure represents private investment that Puch AI will raise through its investors. “Our mission is to make things easier in terms of land, policy support, ecosystem-based support, manpower and clearance operations,” he said. The government has allocated land for an AI city and an AI park, with other companies expected to join the ecosystem.
Separately, Bhatia said the company was “well-funded” and had insufficient financial resources, while declining to divulge financial details. Regarding the investment itself, he stressed that the structure is a partnership between the public and private sectors. “It does not entail any cost to the taxpayers of Uttar Pradesh. On the contrary, it brings investment into the state. The project will be implemented in phases, with the support of external investment partners. We have not received any money, any GPUs or any other form of support from the government,” he said.
Founded about a year ago, Puch AI offers a voice AI service on WhatsApp. Critics in the technology community have dismissed the product as a “wrapper” built on existing AI models, specifically pointing to Google’s “Gemma” family. Bhatia acknowledged that the company does not have its own founding model, but said it has built its infrastructure on open source models designed specifically for Indian users, rather than relying on commercial APIs from companies like OpenAI or Anthropic.
“There are no open source models, no blogs, no reports, no publications — nothing that can be verified or audited by independent parties,” Danish Pruthi, assistant professor of computer science at the Indian Institute of Science in Bengaluru, told HT.
Pruthi also said the company had “no experience or expertise whatsoever in building data centers or setting up universities”, and pointed to what he described as “viral marketing stunts” – including being a top-tier sponsor of Lionel Messi’s tour of India and bidding for Perplexity.
Adityanath announced the MoU on Monday He later explained that these agreements are preliminary. “The MoU submitted by Invest UP is an initial step before conducting detailed due diligence and evaluation of the project… MoUs are not binding on the state government,” he said, adding that the proposals could be terminated if they fail.
Bhatia, who met senior Union ministers including Defense Minister Rajnath Singh and Commerce Minister Piyush Goyal earlier this month, has been actively building the company’s public profile. In August 2025, after OpenAI expanded into India, he posted a message in Times Square addressed to Prime Minister Narendra Modi: “Why applaud OpenAI’s expansion in India? Let’s celebrate the coming of Puch AI to New York,” along with the hashtag #AatmaNirbharBharat.
