After facing scrutiny over ₹25,000 crore Memorandum of Understanding (MOU) with Bengaluru-based startup Puch AI, Uttar Pradesh Chief Minister Yogi Adityanath on March 24 clarified on X that the agreement is a preliminary step and non-binding on the state government.
"An MoU by Invest UP is a preliminary step before detailed due diligence and project evaluation gets done. The MoU with Puch AI is similarly an initiation of the process by Invest UP to explore potential in the AI sector," Adityanath said.
He added that any further progress, including government permissions, approvals, or licences, would be subject to detailed evaluation of prospective investors' proposals, and that MoUs would be terminated for investors who fail to meet the required criteria.
Adityanath had announced the MOU on March 23, positioning it as part of the state’s broader push to build AI infrastructure. The proposed plan includes the development of AI parks, data centres, an AI Commons, and an AI University.
Following the announcement, however, questions were raised online about the scale of the agreement relative to the startup's profile.
A community note on X said, "Puch AI is a 1-year-old startup with revenue of less than 50 lakh a year. They have no real capability or capacity to execute an MoU of this scale."
Puch AI is an early-stage voice startup founded by Siddharth Bhatia and Arjit Jain. The company’s product is built around a WhatsApp-based interface that provides AI access to users.
Bhatia did not respond to AIM's request for comment.
The startup previously entered into a similar agreement with the Andhra Pradesh government in October 2025. It committed to deploying AI solutions for public use cases.
Bhatia proposed acquiring Perplexity, a $20 billion AI company, as a marketing stunt amid rumours of its sale.
Before Puch AI, Bhatia founded TurboML, a San Francisco-based company focused on building a platform for personalised AI systems.
In an earlier interaction with AIM, he said the company aims to build a homegrown foundational model for less than $12 million.
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