- Uttar Pradesh cancelled a Rs 25,000 crore AI MoU with startup Puch AI after a review.
- The cancellation followed Puch AI's failure to provide required financial details on time.
- Due diligence revealed Puch AI lacked the net worth and credible financial backing needed.
The Uttar Pradesh (UP) government has cancelled the Memorandum of Understanding (MoU) worth Rs 25,000 crore signed with Bengaluru-based startup, Puch AI, to expand artificial intelligence (AI) infrastructure in the state. In a statement on Thursday (Mar 26), the UP government detailed that the decision was taken following a review which revealed the company lacked the "credible financial linkages" to execute a project of such scale.
"As per standard protocols laid by State Government, the MoU signed with Puch AI on 23 Mar 2026 was reviewed. Necessary details as per SOP were sought from the investor, but they failed to provide them timely," read the statement by the UP government posted on X (formerly Twitter).
The review showed that Puch AI lacked the required net worth for the scale of the project, prompting the authorities to cancel the MoU.
"Due diligence showed lack of net worth and credible financial linkages for the project's scale. On directions of the State Government, the MoU is cancelled effective today. No rights or obligations remain," it stated.
"The MoU has been cancelled in the interest of transparency and highest level of probity in governance, which are in the core of Government of Uttar Pradesh."
Also Read | 'Exhausted And Ready To Come Home': Student Wants To Return To India Amid Visa Concerns
MoU Cancelled
The now-cancelled agreement was signed on March 23 and projected as a major investment in the state's broader push to position itself as a hub for emerging technologies. In a statement, Puch AI highlighted that the collaboration would have set up AI Parks supported by large-scale data centre infrastructure to help businesses adopt AI, AI Commons for citizen and governance use, and an AI University to train students and working professionals.
However, after several social media users questioned the startup's capacity, noting its relatively small scale, Chief Minister Yogi Adityanath issued a statement, highlighting that an MoU is non-binding and only a preliminary step.
"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," CM Adityanath said.
Meanwhile, Siddharth Bhatia, co-founder of Puch AI said no taxpayer money was involved in the deal, which would be executed in phases with support from "external investment partners". He also claimed that the Rs 42.9 lakh revenue figure cited in several reports belongs to Pucho AI, adding that Puch AI's revenue is not public.
