'Investors often don’t get AI, they’re fixated on...': Startup founder on India’s deep tech disconnect

Amid a growing debate around India’s startup ecosystem and the government's recent push for deep tech innovation, Vinay Borhade, an entrepreneur in the country’s AI startup space, has offered a candid reality check. In a LinkedIn post reacting to Commerce Minister Piyush Goyal’s recent comments critiquing Indian startups for lacking ambition, Borhade called out the structural and cultural challenges that are slowing down serious innovation in AI.

“Deep tech like AI and IoT demands time and effort for real innovation. Yet, fundraising favors flashy ideas over substance—leaving serious research underfunded,” Borhade wrote, echoing a broader sentiment among entrepreneurs who feel underserved by the current investment climate.

He highlighted a persistent mismatch between investor expectations and the nature of AI development. “Investors often don’t get AI. They’re fixated on quick returns, not the long-term potential of good research,” he added.

Borhade’s post paints a picture of an ecosystem that isn’t fully aligned with the demands of building frontier technologies. Despite AI’s transformative potential, he said, "Even interested clients are so cost-conscious that freelance web devs out-earn AI engineers."

The ground reality, according to Borhade, is that most Indian MSMEs are still operating with minimal digital infrastructure. “MSMEs still run on manual processes with zero digital footprint. Basic data science or dashboards? A tough sell,” he wrote.

The issue, he argued, is cultural as much as it is economic. “The 'jugaadu' mindset reigns—clients take pride in saying, ‘I know my business better than you’ or ‘I don’t need your AI to decide how to run my business.’”

Borhade also took a subtle jibe at the government’s emphasis on policies and compliance, stating that these become a “dead end not worth the rant” when the market itself resists AI adoption.

“Indian AI startups have potential,” he concluded. “The question is: will the ecosystem catch up?”

His post adds another layer to the ongoing discourse triggered by Minister Goyal’s remarks, which called for Indian startups to go beyond “lifestyle” businesses and invest in transformative, high-impact innovation.