Indian venture capitalists are making significant strides in establishing a foothold in the United States, particularly in the Bay Area, to engage with the rapidly expanding AI sector. This strategic shift is aimed at nurturing relationships with pioneering startups and gaining a competitive advantage in a market increasingly dominated by AI technologies.
Over the past year, a notable trend has emerged among Indian tech investors, who are relocating parts of their teams to the US. This move is primarily motivated by the desire to remain close to the heart of AI innovation.
Key Players Making Moves
Several prominent venture capital firms have begun to expand their presence in the US:
- Elevation Capital: Currently has three team members in the US, including AI partner Krishna Mehra.
- Peak XV: Recently opened an office in the Bay Area, with a team that includes Arnav Sahu, Shelly Singh, Dini Mehta, Chris Merritt, and Jaime Bott.
- Nexus Venture Partners: Principal Arjun Gandhi relocated to San Francisco earlier this year.
- Z47: Managing partner Aakash Kumar is expected to move to the US to establish operations.
Investment Trends
The shift towards AI investments began in 2025, coinciding with the rise of generative AI, which has led to a significant portion of SaaS investments being redirected towards AI-focused companies. According to Lightspeed India partner Dev Khare, globally, 80-90% of venture capital investments are now funneled into AI.
In India, AI investments have surged to approximately 50%, a marked increase from 15-20% in 2024 and 40% in 2025, with expectations for further growth in 2026.
Challenges in the US Market
Despite the momentum in India, some investors express concerns about the lack of large-scale innovation compared to the US market. An anonymous investor highlighted the necessity of investing in firms that promise substantial returns, which are often found in innovative companies thriving in the US.
Recent Investments
In the past year, several firms, including DeVC (part of Z47), Blume Ventures, Boundless Ventures, Peak XV, and Together Fund, have been actively investing in YCombinator startups. Notably, Activate and Peak XV are in discussions to invest in the US-based voice AI startup Wispr Flow.
Conclusion
The competitive landscape in the US market poses challenges for Indian investors. To enhance their chances of success, many are establishing a presence in the US to build relationships with founders and secure a foothold in this dynamic environment.
