Bengaluru ranks second in Asia for AI Innovation

Bengaluru has secured the second spot in Asia for AI innovation and entered the global top 10 for performance and R&D, the Karnataka government said, according to the Global Startup Ecosystem Report (GSER) 2026.

Ranking 15th globally in the Startup Ecosystem Index, Bengaluru continues to cement its position as India’s leading startup hub and has a $152.8 billion ecosystem value.

The Karnataka government and Karnataka Digital Economy Mission (KDEM), in partnership with Startup Genome, has announced key findings from the report unveiled at VivaTech Paris.

“The finding underscores Bengaluru-Karnataka's growing influence in the global AI landscape. Ranked Asia's #2 AI-native startup ecosystem the region continues to build on its strengths in talent, research, entrepreneurship, and venture capital,” an official release from Karnataka IT and BT department said.

The ecosystem also recorded stronger-than-average growth in early-stage AI funding, reinforcing Karnataka's role in shaping India's AI future, it said.

According to the department, the rankings highlight India's growing innovation footprint, with six Indian ecosystems featured globally.

Recognised as the definitive benchmark for startup ecosystems, GSER draws on data from more than 5.5 million companies across 350+ innovation ecosystems worldwide.

The GSER 2026 ecosystem rankings are based on a weighted composite index across six key success factors: Performance (27.5%), Funding (20%), Market Reach (20%), Talent and Experience (17.5%), AI-Native Cluster (10%), and R&D Engine (5%).

Each factor is scored on a 1–10 scale across more than 350 global ecosystems, making the ranking a multidimensional assessment of ecosystem strength rather than a single-parameter measure, it said.

“Bengaluru-Karnataka is no longer just India’s startup capital; it is increasingly a global DeepTech and AI innovation hub. This recognition by Startup Genome validates our long-term investments in talent, research, entrepreneurship, and emerging technologies. As we build Karnataka’s DeepTech Decade, our focus remains clear: create the next generation of globally impactful companies from Karnataka for the world,” Karnataka IT & BT Minister Priyank Kharge said.

Across the GSER 2026 framework, Bengaluru-Karnataka demonstrates consistent outperformance across multiple high-weight indicators, with particularly strong signals in ecosystem output, innovation capacity, and value creation velocity, the department said.

Noting that Bengaluru demonstrates a high cost-to-output ratio, where globally competitive innovation outcomes are achieved at comparatively lower talent input costs, the release said this places Bengaluru in the global top 10 for exits and number 4 in Asia, reinforcing its position as a capital-efficient global innovation hub rather than a low-cost labour market.

On capital formation, Bengaluru attracted $39 billion in venture funding (2021–2025), ranking among the global top 15 and 4th in Asia, it said. In innovation output, the city’s R&D Engine ranking improved from global top 30 (GSER 2025) to top 10 (2026), reflecting increased patent output and research commercialisation.

In AI-native formation, Karnataka accounts for a significant share of India’s AI startup funding, with approximately 58 percent of national AI venture funding flowing into the state, and ranks second in Asia in the AI-Native Cluster category, it added.

Bengaluru's key highlights in GSER 2026 is the city retaining its position among the world's top 40 startup ecosystems for the second consecutive year.

It is ranked 15th in global Startup Ecosystem, it is in top 10 global and 4th in Asian ecosystems in performance, among top 10 global and 5th Asia ecosystem in R&D Engine, top 15 global and 4th Asia ecosystem in Funding Momentum, top 15 global and 2nd Asia ecosystem in AI-Native Cluster.

The city is also among top 30 global and top 10 Asia ecosystem in talent strength, top 20 Asia ecosystem in affordable talent, and top 30 Asia ecosystem in funding runway.