AI startups look for acqui-hires, mergers to accelerate journey

As companies strive to keep up with the rapid pace of artificial intelligence, startups are increasingly looking at mergers and acquisitions and acqui-hires to accelerate their AI journey and enter new areas.

Some of the startups that have made acquisitions in the last two years include Krutrim and Sarvam, with many companies evaluating potential deals, ET has learnt.

Ola’s AI arm, Krutrim, acquired semiconductor company Bodhi Computing in 2023 to enter the semiconductor space. Krutrim announced last year that it would launch AI chips Bodhi 1 and Bodhi 2 in 2026 and 2028, respectively.

A Krutrim spokesperson said in a statement that the company is building a full AI stack including silicon design and advanced AI chips such as Bodhi 1 and Bodhi 2, which are being developed by its engineers.

In 2024, Sarvam acquired two startups – Samta Law that works in the legal space and agentic AI firm Pipable AI, ET has learnt. Sarvam has since launched Legal Workbench, which offers AI-powered tools for review and research, currently a key focus area for the company. An email sent to Sarvam did not elicit any response till press time Thursday.

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ChargeBee recently acquired Trainn, an AI-powered customer training platform. Multiple startup founders told ET that they are open to acquiring new AI companies that are critical to their offerings.

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More such M&A deals are expected, mirroring a global trend, as AI becomes critical to companies’ survival. According to a report from Aventis Advisors, global M&A deals in AI increased from 17 in 2022 to 271 in 2023 and 430 in 2025, at a CAGR of 26%.Rise in AI M&A

There are a few factors at play for the rising mergers and acquisitions in the AI space.

A Bengaluru-based startup investor told ET that there are three key reasons why startups go for M&A – accelerating their AI journey, increasing market share and acquiring new capabilities. “In our portfolio, some of the startups are evaluating companies for acquisition that bring key AI capabilities for one of the three reasons mentioned,” he added.

Vivek Khandelwal, cofounder and chief business officer, CogniSwitch, which helps enterprises build AI agentic solutions, explained that in the past two years, as enterprises doubled down on AI proof of concept (PoC), most PoCs haven’t moved forward. “Enterprises pulled a plug on these solutions. These startups are now running on thin ice. But at the same time, these are extremely smart people who have been early adopters of GenAI. These startups are now up for grabs for acqui-hires,” he added.

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