Lucknow: After a controversy over a Rs 25,000-crore Memorandum of Understanding (MoU) with Bengaluru-based startup Puch AI, the Uttar Pradesh government has decided to verify the company’s credentials and review its action plan before proceeding further.
The Invest UP department has asked the company to submit its Detailed Project Report (DPR) and action plan within the next few days.
“We are not cancelling the MoU. We will first verify their credentials and then decide how to move forward with the project,” Invest UP CEO Vijay Kiran Anand told ThePrint.
He said the company’s co-founder has also issued a clarification on X, “which should address several concerns raised earlier. We believe in full authenticity and clarity, and will give NOC only after our evaluation”.
The Samajwadi Party and its leader Akhilesh Yadav targeted the BJP-led government, questioning the MoU with a company founded just last year.
“If it (the company) was actually formed in 2025 with its website also from 2025, (and then it) signs an MoU in 2026, how can a startup or a newly formed AI company make such a large investment so quickly?” Yadav told mediapersons in Lucknow Tuesday. “Somewhere, people from the Bharatiya Janata Party may be involved, who could be investing money in that company behind the scenes.”
Amid growing social media backlash over the scale and terms of the announcement, Chief Minister Yogi Adityanath clarified in a post Tuesday that the proposed Rs 25,000-crore MoU with Puch AI is non-binding, and merely a preliminary arrangement.
“An MoU by Invest UP is a preliminary step before detailed due diligence and project evaluation. The MoU with Puch AI similarly marks the initiation of a process to explore potential in the AI sector. MoUs are non-binding on the state government,” wrote the CM.
MoU करने से पहले से AI से ही ‘पूछ’ के बारे में पूछ लिया होता।
अपने आस-पास के ऐसे ‘फ़ाइव परसेंटिया’ घूसखोर व ख़ुदगर्ज़ लोगों से बचना चाहिए जो आपकी अनभिज्ञता या अज्ञान का दुरुपयोग करते हैं। इससे आपकी AI (Artificial Image) मतलब ले-दे के बनाई गई ‘कृत्रिम छवि’ पर भी बहुत ख़राब…
— Akhilesh Yadav (@yadavakhilesh) March 25, 2026
Any further progress including permissions, approvals, or licences, will depend on a thorough evaluation of the investor’s proposal, he said. “Any prospective investor falling short of these criteria will automatically have their MoU terminated. Uttar Pradesh remains committed to transparent, responsible, and future-focused development.”
The chief minister had announced Monday that his government has signed the Rs 25-000 crore MoU with Puch AI, outlining plans to transform Uttar Pradesh into an AI-driven hub through AI parks, large-scale data centre infrastructure, an “AI Commons” platform for citizens, and a dedicated AI university.
After Akhilesh Yadav’s statement, several users on social media questioned if such a young startup could deliver on a Rs. 25,000-crore commitment. Chief Minister Yogi Adityanath’s clarification followed within hours.
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…
— Yogi Adityanath (@myogiadityanath) March 23, 2026
The government has also identified a 40-acre site near the Lucknow airport for building what is being projected as India’s first AI City, with Noida, Kanpur, Varanasi and Prayagraj also included in the broader plan.
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Puch AI’s clarification
Founded in 2025 by Siddharth Bhatia and Arjit Jain, Puch AI seeks to make artificial intelligence accessible to the masses. Its platform primarily operates through WhatsApp and voice calls, offering free services such as chat assistance, image and video generation, and fact-checking, with a strong emphasis on regional languages.
Clarifying a few things, starting with the MoU.
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…
— Siddharth Bhatia (@siddharthb_) March 24, 2026
After the controversy erupted, Puch AI Co-Founder Siddharth Bhatia said the MoU 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,” he said in a post on X. “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, he said.
He also claimed his firm is being targeted because of a “bug”.
“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 said.
“Those who are asking: What’s your valuation/annual revenue? Are you bootstrapped? 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,” said Bhatia.
The Puch AI co-founder is a technologist-turned-entrepreneur who has shifted his focus to building artificial intelligence for large-scale use.
A BITS Pilani alumnus, he holds a PhD in Computer Science from the National University of Singapore.
According to his LinkedIn profile, his research has been published at major global conferences and he has earned multiple awards. During his doctoral studies, he also interned with Google Research and Amazon Web Services.
(Edited by Ajeet Tiwari)
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