AI4Bharat researchers in India have raised $12 million in venture finance from Peak XV and Lightspeed Venture for an AI startup.

The larger-than-usual seed financing round reflects the increased interest in generative AI, following OpenAI's ChatGPT's capacity to engage in human-like discussions. Most seed rounds range from $1 million to $2 million.

According to sources, Vivek Raghavan and Pratyush Kumar, who worked at AI4Bharat on constructing AI models for speech recognition and translation, are launching a new startup called Sarvam that will develop custom-made large language models (LLMs) for India-centric use cases.

LLMs are computer algorithms that interpret and generate text like that of humans. They power popular virtual assistants seen on cell phones and the Internet. The move comes months after AI4Bharat, a mobile assistant supported by the Indian government, announced a mobile assistant that promises to make information on government initiatives available in several languages.

Peak XV Partners has made its first investment since rebranding from Sequoia Capital India and SEA following a split with its US-based parent firm last month. According to its website, Peak XV's other AI investments include voice assistant startup AI Rudder, machine vision firm Mad Street Den, and enterprise marketing platform Insider.

The hype surrounding generative AI among consumers and businesses has helped relevant startups raise funding even as the economy still needs to grow, reducing investment for other companies. According to Venture Intelligence data, Indian AI startups raised $583 million this year as of June. Last year, they raised a total of $2.45 billion.