Karnataka's deep tech decade: Priyank Kharge on building Asia's AI capital

When Karnataka's IT Minister Priyank Kharge speaks about artificial intelligence, he does so with a quiet confidence that feels earned, not rehearsed. The numbers tell part of the story: Bengaluru ranks among the top five AI cities globally, third in skill penetration worldwide, but it's his vision for what comes next that captures attention.

At TechSparks 2025, during a fireside chat with YourStory Founder and CEO Shradha Sharma, Kharge laid out Karnataka's blueprint to become what he calls the "Deep Tech Capital of Asia." It's an ambitious title, but one backed by both policy and capital.

AI as governance, not just business

For Kharge, AI isn't merely a buzzword or an economic opportunity; it's a tool for reimagining how the government works. "We're using AI to improve governance," he said, pointing to a new centre in e-governance designed to test how artificial intelligence can accelerate citizen-facing services.

To ensure the state stays ahead of the curve, Karnataka has formed an advisory committee on emerging technologies, chaired by Kharge and co-chaired by the Department of Skill Development. The committee's mandate spans AI, machine learning, cybersecurity, and digital forensics, a recognition that Karnataka's workforce needs to be prepared for the coming wave of automation and data-driven decision-making.

Earlier this year, the state released its Responsible AI Policy, a framework meant to encourage innovation without stifling it. "The European Union has a straitjacket approach; America has a vertical bias," Kharge noted. "We're studying both. Our goal is not to overregulate but to create the best possible environment where innovation can thrive."

The deep tech decade: Capital meets infrastructure

Karnataka's ambitions extend far beyond AI. The government has committed Rs 600 crore to a Deep Tech Fund focused on advanced technology startups, alongside a Rs 1,000 crore Local Economic Acceleration Program (LEAP) designed to decentralise innovation across the state.

"We're calling it the Deep Tech Decade," Kharge said. "We want to ensure that deep tech, AI, and other frontier technologies have the right kind of capital, mentorship, and infrastructure."

The LEAP initiative represents a deliberate shift away from Bengaluru's dominance, pushing startup activity into regional hubs like Mysuru, Mangaluru, Hubballi-Dharwad, and Manipal. Each city is being developed as a specialised cluster with common instrumentation labs, nano GCCs, and dedicated incubators.

"These clusters are already delivering," Kharge said. "Mysuru alone has over Rs 6,000 crore in IT exports. Mangaluru is becoming a GCC hub—good air, great talent. People go surfing at 7 am and are in the office by 9."

A government that listens

One theme threaded through Kharge's remarks: policymaking as collaboration, not decree. "All our policies are drafted by listening," he emphasised. "It's a collaboration. It's participatory in nature."

That philosophy has shaped Karnataka's startup ecosystem in tangible ways. Under the Elevate programme, launched in 2017, the state provides up to Rs 50 lakh in funding to early-stage startups through what Kharge describes as a transparent and efficient process. "We've funded 1,087 startups so far," he said. "And we're not just giving grants, the government is becoming the first customer."

Women entrepreneurs have been central to this growth. Over 32% of all startups registered with the state are women-led, supported by dedicated funds and mentorship networks. "It's a serious startup ecosystem," he said.

A realist's optimism

Asked what makes him hopeful about India's future, Kharge paused. "I'm a realist," he said. "As a government, I need to deliver within ten years, not by 2047."

But his optimism is rooted in something concrete: the talent, agility, and ambition he sees in Karnataka's youth. "The demography, the knowledge, the skill set, the aspiration, it's all there," he said. "We just need to create policies and environments that help them evolve and succeed."

He paused again, then smiled. "I've never seen a demography as agile as Karnataka's. That's what keeps me hopeful."