Why the Uttar Pradesh CM Backtracked After Announcing a 'Rs 25,000-Crore' MoU
New Delhi: Uttar Pradesh Chief Minister Adityanath has backtracked on his own announcement of a "Rs 25,000-crore memorandum of understanding" with the artificial intelligence startup Puch AI after backlash over its scale.
On March 23, Adityanath had posted on X:
"New Uttar Pradesh is embracing the power of Artificial Intelligence.
"A ₹25,000 Crore MoU with Puch AI will bring AI Parks, large-scale data center infrastructure, AI Commons, and an AI University to the state.
"This initiative will strengthen governance, drive innovation, and create future-ready opportunities for our youth.
The proposed plan, according to the chief minister, thus included AI parks, an AI Commons platform and an AI university. Reports noted that a 40-acre site near Lucknow airport has been identified for what is being called India’s first "AI City," with Noida, Kanpur, Varanasi and Prayagraj also part of the broader plan.
But readers differed with Adityanath's expectation of what Puch AI could deliver, so much so that a 'community note' appeared below the post based on readers' inputs. This said:
"Puch AI is a 1-year-old startup with revenue of less than 50 Lakh/year. They have no real capability or capacity to execute an MOU of this scale. The founder lives on viral controversies; earlier he proposed to acquire perplexity (worth $20 billion)."
On social media, many pointed to Puch AI's lack of external funding, small team and lack of track record.
A day later, Adityanath 'quoted' his previous post and wrote:
"An MoU by Invest UP is a preliminary step before detailed due diligence and project evaluation gets done.
"The MoU with Puch AI is similarly an initiation of the process by Invest UP to explore potential in the AI sector.
"MoUs are non-binding on the State Government. Any further progress including any Government permission, approval or license is subject to detailed evaluation of prospective investors proposal .
"Any prospective investor falling short of the above will automatically have their MoU terminated.
"Uttar Pradesh remains committed to transparent, responsible, and future-focused development.
Echoing Adityanath, Invest UP CEO Vijay Kiran Anand told Hindustan Times that the MoU was "non-binding."
“Puch AI had given a proposal to us on Friday, and we signed a non-binding MoU with them on Monday. We have asked them to submit due diligence documents and they have been given three days to do so. If they pass this due diligence process, we will go ahead with them; otherwise, we will cancel the MoU,” he said.
Anand also claimed that the Rs 25,000 crore figure represented "private investment that Puch AI would mobilise through its investors."
Puch AI co-founder Siddharth Bhatia also issued a clarification, stating that the MoU signed with Uttar Pradesh did not involve any public funds.
While many flagged Puch AI as a company with a low revenue of "Rs 42.9 lakh", Bhatia claimed that this is "a bug in Google’s AI, which has confused Puch AI with another company called Pucho AI. The Rs 42.9 lakh revenue figure belongs to Pucho AI, not Puch AI."
"Puch AI’s revenue is not public," he added.
He also noted that the start-up was "well funded" and that it was a "conscious choice" for it to not have an app.
Bhatia has this month met defence minister Rajnath Singh and commerce minister Piyush Goyal, publicising photos of these meetings on his X account.
Reports also noted that scepticism was also fuelled by Bhatia’s history of "headline-grabbing announcements." CNBCTV18 reported that in August 2025, he said he would make a $50 billion unsolicited offer to acquire Perplexity AI and Google Chrome, despite Puch AI being valued at $50 million at the time. Anyone wishing to participate in the deal was asked to email perplexity@puch.ai, with the first person to convince Perplexity’s CEO promised an iPhone. The post went viral, but was widely viewed as a publicity stunt rather than a serious business move, the report said.
This article went live on March twenty-fifth, two thousand twenty six, at twenty-four minutes past seven in the evening.The Wire is now on WhatsApp. Follow our channel for sharp analysis and opinions on the latest developments.
