India’s affluent are increasingly turning to the secondary market to gain exposure to the rapidly growing artificial intelligence (AI) sector. This trend reflects a broader appetite for AI investments, driven by the expectation of high returns and the transformative potential of AI technologies across various industries.
Platforms like Forge Global and Nasdaq Private Markets (NPM) have emerged as key venues for buying and selling shares in privately held AI companies. NPM, which hosts shares of approximately 15,000 private firms, has reported significant trading volumes of $60 billion. Forge's Private Market Index, a benchmark for late-stage, venture-backed companies, has seen a substantial climb of 67.9% year-to-date.
Several factors contribute to this growing interest in the AI secondary market. Firstly, the Indian AI market is experiencing rapid expansion. Valued between $7-$10 billion currently, projections estimate it will more than triple, reaching $17 billion by 2027, with a CAGR of up to 35%. Some research even suggests the market could reach $27.7 billion by 2032 with a double-digit CAGR of 19.2%. This growth is fueled by the increasing adoption of AI across sectors like healthcare, finance, and manufacturing.
Secondly, the IPO market has been relatively slow, creating a liquidity crunch for venture capital funds. The secondary market provides an avenue for investors to generate cash by selling their stakes in mature startups, which can then be reinvested in newer AI ventures. This "recycling" of capital is becoming increasingly common, with corporate investment arms actively using the secondary market to rebalance their portfolios and free up funds for AI investments.
Thirdly, domestic capital is playing a significant role in the Indian AI funding ecosystem. In 2025, Indian AI companies have raised $1.4 billion, with domestic seed funding options becoming more prevalent. This is due, in part, to the rise of early-stage Indian VCs, family offices, institutional investors, and angel investors.
Active investors in the Indian AI space include Antler India, which has focused on doubling down on its AI portfolio, investing in startups like AIGnosis, Nugen, and Pascal AI Labs. Peak XV Partners, Accel, and Blume Ventures are also among the top investors making significant bets on AI-driven companies. These firms recognize the potential of AI to optimize operations, enhance efficiency, and reduce costs for organizations. Chennai-based SuperOps and Bengaluru/San Francisco-based Atomicwork, which specialize in AI-driven operational empowerment, secured $25 million in funding rounds in 2025.
However, the rapid growth of AI also presents challenges. The Competition Commission of India (CCI) has acknowledged potential competition concerns, such as concentration in the AI value chain, ecosystem lock-in, algorithmic collusion, price discrimination, exclusive partnerships, and the opaque nature of algorithms. A CCI study suggested that enterprises conduct self-audits of their AI systems to address potential competition concerns and that the watchdog strengthen its technical capabilities and infrastructure.
Despite these challenges, the outlook for AI in India remains positive. The Indian government is actively promoting AI through initiatives like the IndiaAI mission, which aims to boost computing capacity, create dataset platforms, support startup funding, and develop AI-related skills. Union Home Minister Amit Shah stated that India aims to rank among the top ten countries in the Global Innovation Index within three years and lead global innovation in the coming years.
As India continues its quest to become the world's third-largest economy, the adoption of AI will be crucial. While the direct contribution of AI to the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) is currently less than 1%, its systemic impact is expected to grow, particularly in automation-heavy sectors like finance, retail, logistics, and telecom.
