VCs Say AI Is Too Big for Them. Enterprises Must Step In.
Peak XV's Shailendra Singh says VCs are becoming marginal in AI funding. Menlo Ventures' Deedy Das sees Anthropic as undervalued at $2 trillion. India deeptech trends.
At the Economic Times World Leaders Forum in New Delhi on August 21-22, Peak XV Partners managing director Shailendra Singh said venture capital firms are becoming "somewhat marginal" in the AI investment cycle. The capital requirements are simply too large for most VC funds to lead. Singh argued that corporate balance sheets need to fill the gap, while Menlo Ventures partner Deedy Das flagged structural challenges for India in building globally competitive AI foundation models, and called Anthropic undervalued even at a $2 trillion IPO valuation.
What happened
| Detail | Fact |
|---|---|
| Event | ET World Leaders Forum, New Delhi, August 21-22 |
| Key speaker 1 | Shailendra Singh, Managing Director, Peak XV Partners |
| Key speaker 2 | Deedy Das, Partner, Menlo Ventures |
| Anthropic IPO valuation (Das’s view) | $2 trillion would still undervalue the company |
| Corporate AI investment examples cited | HCLTech in Sarvam AI; Amazon in Anthropic |
Shailendra Singh told the forum that AI now requires capital beyond what venture funds typically deploy. He said VCs will still matter for finding and backing companies early, but as the AI cycle expands, enterprises need to become the primary source of growth-stage funding. He cited HCLTech’s stake in Sarvam AI and Amazon’s commitment to Anthropic as the template going forward.
Deedy Das was more pointed about India’s position. He said top AI research talent is concentrated in San Francisco, and Indian investors have limited appetite for the kind of high-risk bets that foundational AI companies require. That combination makes it hard for India to produce a globally competitive foundation model company in the near term.
What is Anthropic’s expected IPO valuation?
Das said he is bullish on Anthropic ahead of its public listing. He argued that even a $2 trillion valuation would still leave the company underpriced. Bloomberg reported separately that Anthropic expects its IPO to match or exceed SpaceX’s record-setting offering. We covered Anthropic’s IPO filing and the public response in more depth in an earlier piece on the $2 trillion valuation and the backlash it attracted.
Indian VCs are quietly moving into deeptech
The forum comments come alongside a broader shift in how specialist Indian VC funds are allocating capital. According to Tracxn data reviewed by ET, funds including Omnivore, Ankur Capital, Avaana Capital, Aavishkaar Capital, and Incubate Fund Asia India have all expanded beyond their traditional sectors since 2024.
- Omnivore, an agri-focused fund, is in advanced talks to back robotics startup Perceptyne. Perceptyne has signed a term sheet to raise $10 million from Premji Invest at a $50 million valuation.
- Aavishkaar is evaluating spacetech and plans to include deeptech and AI as core areas in its Next Gen Fund.
- Incubate Fund Asia, traditionally a fintech and B2B supply chain investor, is targeting advanced manufacturing, deeptech, and spacetech through its fourth fund.
Omnivore’s Mark Kahn explained the shift: deeptech businesses now offer better defensibility and clearer exit paths than they did a few years ago. Government momentum is also a factor. India’s Rs 1 lakh crore Research, Development and Innovation Fund, alongside Startup India Fund of Funds 2.0, both prioritise deeptech and technology-led manufacturing.
Why it matters
Singh’s “marginal VCs” framing is a significant admission from one of India’s most prominent venture investors. It signals that the capital structure of the AI industry is shifting toward large corporates and away from traditional venture funds. For startups, this means the funding playbook is changing. A great seed round from a brand-name VC may no longer be enough if you are building anything that requires serious compute or infrastructure.
For businesses considering AI integration into their own operations, the implication is also practical. The tools and platforms being built now, from enterprise AI agents to foundation models, are increasingly funded and shaped by the companies that will eventually deploy them. That creates a feedback loop where corporate users have more influence over AI product direction than they did in the SaaS era.
Das’s India talent critique is worth noting too. It does not mean Indian AI companies cannot succeed, but it does suggest that competing at the foundation model layer globally is a steeper climb than the narrative sometimes admits.
Our take
Singh is right on the math. A VC fund with $500 million under management cannot lead a $1 billion compute round. Corporate balance sheets can. But corporate-led AI investment also has a track record of moving slowly, attaching strings, and optimising for strategic fit rather than breakthrough research. HCLTech backing Sarvam AI is a good sign. It does not automatically mean India will produce the next Anthropic.
Das’s $2 trillion floor for Anthropic is an interesting bet. The valuation drew real backlash when the IPO filing was reported, largely because of Anthropic’s data center spending commitments. The bull case rests entirely on whether Claude can maintain its position as enterprises lock in AI vendor relationships over the next two to three years. That is not guaranteed.
For most business operators, the takeaway is simpler: the AI funding environment is consolidating around large corporate players. Watch which enterprises are making strategic AI investments in your industry. Those investments tend to predict which tools and platforms become the defaults.
What to do about it
- Track which large corporations in your sector are making AI investments. Those companies often dictate which platforms become industry standards.
- Evaluate AI tools backed by enterprises with long deployment horizons, not just the ones with the biggest VC rounds.
- If you are a founder seeking AI-era funding, prepare a case for corporate strategic investors, not just traditional VCs.
- If you need help assessing AI tools and workflows for your business, talk to the Lumien team before committing to a platform.
The era of VC-led AI is not over, but it is no longer the only game in town.
Frequently asked questions
Why are VCs becoming less important in AI funding?
According to Peak XV Partners MD Shailendra Singh, AI now requires capital pools larger than most VC funds can provide. He said corporate balance sheets, like Amazon's investment in Anthropic and HCLTech's stake in Sarvam AI, are better suited to fund the AI cycle at scale.
What is Anthropic's expected IPO valuation?
Menlo Ventures partner Deedy Das said a $2 trillion valuation would still undervalue Anthropic. Bloomberg reported that Anthropic expects its IPO to match or exceed SpaceX's record IPO.
Why does India struggle to build globally competitive AI companies?
Deedy Das of Menlo Ventures cited two main reasons: top AI research talent is concentrated in San Francisco, and Indian investors have limited appetite for the high-risk bets that foundational AI development requires.
Which Indian VC funds are investing in deeptech?
According to Tracxn data reviewed by ET, Omnivore, Ankur Capital, Avaana Capital, Aavishkaar Capital, and Incubate Fund Asia India have all expanded into deeptech since 2024, moving beyond their traditional focus areas into robotics, spacetech, and advanced manufacturing.
