Yogi Adityanath's UP govt explains why it scrapped the ₹25,000 crore deal with 1-year-old startup Puch AI within days

The Uttar Pradesh government has unilaterally terminated its ₹25,000 crore investment agreement with artificial intelligence startup Puch AI, citing the firm's failure to demonstrate the financial capacity required for a project of such scale. According to an official statement from Invest UP, the cancellation was executed on Thursday following a standard protocol review that identified a critical lack of net worth and credible financial linkages. The move comes just days after Chief Minister Yogi Adityanath initially publicized the ambitious plan for AI parks and a dedicated university, only to later clarify that such MoUs are preliminary and non-binding. While the UP administration emphasizes its commitment to "probity in governance," the startup's leadership maintains that the partnership was structured as a phased public-private initiative requiring zero taxpayer funds.

The Rise and Fall of the ₹25,000 Crore UP Deal

The controversy began on March 23, 2026, when Chief Minister Yogi Adityanath announced via X (formerly Twitter) that the state had signed a ₹25,000 crore MoU with Puch AI. The proposed project included AI Parks, large-scale data centers, an AI Commons platform, and an AI University.



However, the announcement was immediately met with media reports questioning how a startup founded in June 2025 could mobilize such capital. Invest UP subsequently sought detailed financial disclosures as per Standard Operating Procedures (SOP), but officials stated the investor failed to provide them in a timely manner. Consequently, the MoU was cancelled with immediate effect, with the government stating, "No rights or obligations remain".

Puch AI Founder Siddharth Bhatia’s Clarification

Following the initial backlash, Puch AI co-founder Siddharth Bhatia issued a detailed response on Tuesday, March 24. Addressing reports that the company’s revenue was a mere ₹42.9 lakh, Bhatia claimed this was a "bug in Google's AI" that confused his firm with another entity called Pucho AI. While he did not disclose the actual revenue, he asserted that the startup is "well-funded" by external partners and not bootstrapped. Bhatia emphasized that the MoU involved zero cost to taxpayers and was intended to attract private investment into the state in phases. He also clarified that the platform is a "voice-first" domestic consumer offering accessible via WhatsApp, designed specifically for Indian users who prefer local languages.

Who is Siddharth Bhatia, Puch AI founder?

Puch AI was founded by Siddharth Bhatia, an alumnus of BITS Pilani and the National University of Singapore (NUS), where he completed a PhD in Computer Science. Bhatia previously worked as a researcher at Google and Amazon Web Services before co-founding the startup with Arjit Jain, a graduate of IIT Bombay. The company describes its mission as making AI accessible to millions of Indians through simple interfaces like voice notes and WhatsApp, bypassing the need for separate apps or websites. Despite the recent UP cancellation, the founders maintain that their infrastructure is built in-house on open-source models rather than being a mere "wrapper" for existing APIs like OpenAI's ChatGPT.

(With agency inputs)