Traffic woes aside, Bengaluru remains India’s innovation and talent engine
Bengaluru maintains its dominant position in the country's tech landscape and is poised to lead from the front in the world of AI, according to the Bengaluru Innovation Report
Despite its traffic and infrastructure challenges, Bengaluru remains the leading destination for technology innovation not only in India but also globally. It is now becoming the hub for artificial intelligence (AI) development.
The reasons are many. Bengaluru scores high marks across all segments of the technology industry, such as IT services, startups, global capability centres (GCCs), and semiconductors, according to Bengaluru Innovation Report 2025, done jointly by the Karnataka government, Startup Karnataka, K-Tech, 3one4 Capital and Karnataka Digital Economy Mission.
The report says that Bengaluru holds the number five position among the top 59 AI cities globally. It leads in the share of AI funding of startups and tops in the AI hiring intent in the country.
“Bengaluru continues to serve as the nation's primary growth engine and innovation powerhouse, a city now firmly at the forefront of Al and Frontier Computing,” Karnataka IT & BT Minister Priyank Kharge remarked.
He further noted, “Karnataka's consistent leadership in the India Innovation Index, where it has ranked first for consecutive years, reflects the strength of our ecosystem and the foresight of our policy interventions.”
It's taken Bengaluru decades to reach this level. “Every stage of Bengaluru’s growth has built enduring reservoirs of human capital, institutions and financial depth that served as the launchpad for the next,” the report notes.
First, it was IT services and scientific research, followed by consumer and ecommerce startups and fintech, along with SaaS companies. Next were EV, manufacturing and hardware companies. And now it is the age of AI.
“The city's advantage begins with its talent density. Universities, research institutes, and specialised labs sustain a steady pipeline of engineers, scientists, and product leaders,” T V Mohandas Pai, Chairman, 3one4 Capital, said.
Talent hub
Bengaluru attracts talent from across the country. It is already home to 2.4 million software engineers. Startups expand this number by a further 150,000-200,000. The city also has 350,000 professionals in the semiconductor space.
The city has moved to 14th position from 21st in the Global Startup Ecosystem Report ranking. It has received $38 billion in venture capital funding between 2020 and 2024.
According to the report, one in five growth stage VC investors are prioritising AI. This has been largely due to four key reasons: specialised talent and leadership in frontier tech, dedicated research and development backbone, capital depth and startup velocity. And the larger theme is building the applications on the AI platform.
“Bengaluru's unique strength lies in building the 'application layer' of AI, translating cutting-edge technology into products that create impact. In the last 5 years, the city attracted 58% of India's total Al startup funding, reflecting its strategic leadership in the global Al race,” Accel India Founding Partner Prashanth Prakash says.
Karnataka, and especially Bengaluru, lead in the technology ecosystem. The state hosts 40% of the GCCs in the country,
Bengaluru is a holistic innovation hub due to these four reasons: human capital, financial capital, policy ecosystem and institutions, and digital infrastructure.
Edited by Affirunisa Kankudti