Uttar Pradesh Chief Minister Yogi Adityanath on Tuesday clarified that the state's proposed Rs 25,000 crore Memorandum of Understanding (MoU) with Bengaluru-based startup Puch AI is non-binding and only a preliminary step. This statement came after the announcement faced criticism and widespread discussion on social media regarding the scale and terms of the agreement.
Earlier, Adityanath had announced that Uttar Pradesh signed the MoU with Puch AI to build a comprehensive AI ecosystem. The plan includes AI Parks supported by large-scale data centres, an AI Commons platform for citizen and governance applications, and a dedicated AI University to train tech talent.
A 40-acre site near Lucknow airport has been identified for India's first AI City, while Noida, Kanpur, Varanasi, and Prayagraj are also part of the broader initiative.
What Is Puch AI And What Is The Controversy?
Puch AI, founded in 2025 by Siddharth Bhatia and Arjit Jain, is a Bengaluru-based startup focused on making AI accessible to everyday Indians. Its platform primarily operates via WhatsApp and voice calls, offering free services such as chat assistance, image and video generation, and fact-checking, with strong emphasis on regional languages.
Over a million users engage with Puch AI each month, and more than 60% of them are experiencing AI for the first time, often in their native languages through voice notes.
However, the MoU drew criticism due to the gap between Puch AI's scale and the Rs 25,000 crore commitment. The company's reported annual revenue was Rs 42.9 lakh as of March 31, 2025, nearly 6,000 times smaller than the proposed MoU value.
It has raised no external funding, and critics cited its small team and limited infrastructure experience as potential concerns. Skepticism was also fueled by co-founder Siddharth Bhatia's previous headline-grabbing announcements, including an August 2025 plan to make a 50 billion dollars unsolicited offer to acquire Perplexity AI and Google Chrome, widely seen as a publicity stunt.
Yogi Adityanath's Response
Following the backlash, Adityanath clarified the nature of the MoU, stating, "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."
An MoU by Invest UP is a preliminary step before detailed due diligence and project evaluation gets done.
— Yogi Adityanath (@myogiadityanath) March 24, 2026
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… https://t.co/f0sEL4hU9x
"MoUs are non-binding on the State Government. Any further progress, including any Government permission, approval or licence, is subject to detailed evaluation of the prospective investor's 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," Adityanath wrote in an 'X' post.
Puch AI Co-Founder Responds
Siddharth Bhatia, co-founder of Puch AI, also addressed the concerns on 'X' regarding the MoU and company operations.
He wrote, "are you taking taxpayer money? No. The MoU signed with the UP Government is structured as a public-private partnership. It does not involve any cost to the taxpayers of Uttar Pradesh. On the contrary, it brings investment into the state. The project will be executed in phases, with support from external investment partners. We have not taken any money, any GPUs, or any other form of support from the Government. The only part of this MoU that involves citizens is that they'll receive free access to AI, in their own language and through familiar interfaces, via AI Commons."
Addressing revenue concerns, Bhatia stated, "No. 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."
Clarifying a few things, starting with the MoU.
— Siddharth Bhatia (@siddharthb_) March 24, 2026
Are you taking taxpayer money?
No. The MoU signed with the UP Government is structured as a public-private partnership. It does not involve any cost to the taxpayers of Uttar Pradesh. On the contrary, it brings investment into the…
On funding and infrastructure, he added, "we'll share those details when the time is right. For now, as a private company, we're not required to make our valuation or revenue public. But, if you're curious, we're not bootstrapped. We're a well-funded startup."
Regarding the company's mission, he explained, "we want to bring AI to everyone in India. Today, many people already use tools like ChatGPT and Gemini, but millions still cannot. Your parents, shopkeepers, drivers, and many others are being left out because AI, in its current form, is not built for them."
Explaining Puch AI's approach, Bhatia wrote, "Puch AI is building the domestic consumer AI offering for the masses. We're bringing AI to people through simple, familiar interfaces like WhatsApp and voice calls, so that it is easy to use even for those who cannot type and prefer to interact through voice."
He also clarified, "wrappers are generally defined as making API calls to AI providers like OpenAI and Anthropic. So no, Puch AI is not a wrapper. We do not use any APIs. We have built our entire infrastructure in-house on top of open-source models, and engineered it for the Indian context. However, if you define a wrapper as any company that does not have a foundational model pretrained from scratch, then yes, Puch AI is a wrapper."
On challenges and criticism, Bhatia said, "It is a very interesting situation, where the Government understands the importance and wants to do good, but it becomes difficult to do any good when so many bad actors are rooting for you to fail. Thousands of paid accounts are ready to try to shape narratives to fit their own political agenda. Everything from Community Notes to actual news articles and journalism gets weaponized against you, because your failure gets more views."
He added, "Not sure. Quite exhausted. Maybe this is the time to sign off."
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