The Crossbill News Desk
The Uttar Pradesh government has scrapped its recently signed Rs 25,000-crore memorandum of understanding with artificial intelligence startup Puch AI, days after Chief Minister Yogi Adityanath appeared to distance himself from the announcement amid mounting questions about the company’s credentials.
The decision to cancel the agreement was made public late on March 26 by Invest UP, the state’s Investment Promotion & Facilitation Agency, through a post on X.
Invest UP stated: “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. 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. 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.”
The agreement, signed on March 23, had initially been showcased by Adityanath as a major step towards transforming Uttar Pradesh into a hub for artificial intelligence and emerging technologies.
Promoting the initiative, the Uttar Pradesh CM wrote on X, stating, “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 create future-ready opportunities for our youth.”
However, the announcement quickly drew scrutiny online, with several users highlighting that Puch AI is a relatively new startup, reportedly about a year old, and said to have annual revenues of under Rs 50 lakh.
While founder Siddharth Bhatia disputed the revenue estimates circulating publicly, he did not disclose the company’s exact financial figures. He also maintained that the project would not involve taxpayer funds and would instead be rolled out in phases with backing from “external investment partners”.
Scepticism deepened as commentators questioned whether the company possessed the financial and operational capacity to deliver on a project of such magnitude.
Puch AI had previously drawn attention for bold claims, including a proposal to acquire Perplexity, a $20-billion AI firm, which further fuelled doubts about its scale and credibility.
A day after the initial backlash, Adityanath reposted his earlier announcement and clarified: “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. MoUs are non-binding on the State Government. Any further progress including any Government permission, approval or license is subject to detailed evaluation of prospective investors proposal . Any prospective investor falling short of the above will automatically have their MoU terminated.”
The controversy unfolded even as Bhatia shared photographs on social media of recent meetings with Defence Minister Rajnath Singh and Commerce Minister Piyush Goyal, projecting growing engagement at high levels.
With the cancellation now formalised, the episode has raised fresh questions about vetting processes and the promotion of large-scale investment commitments in the state’s rapidly evolving technology sector.
The decision to cancel the agreement was made public late on March 26 by Invest UP, the state’s Investment Promotion & Facilitation Agency, through a post on X.
Invest UP stated: “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. 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. 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.”
As per standard protocols laid by State Government, the MoU signed with Puch AI on 23 Mar 2026 was reviewed.
— INVEST UP (@_InvestUP) March 26, 2026
Necessary details as per SOP were sought from the investor, but they failed to provide them timely. Due diligence showed lack of net worth and credible financial…
The agreement, signed on March 23, had initially been showcased by Adityanath as a major step towards transforming Uttar Pradesh into a hub for artificial intelligence and emerging technologies.
Promoting the initiative, the Uttar Pradesh CM wrote on X, stating, “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 create future-ready opportunities for our youth.”
New Uttar Pradesh is embracing the power of Artificial Intelligence.
— Yogi Adityanath (@myogiadityanath) March 23, 2026
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…
However, the announcement quickly drew scrutiny online, with several users highlighting that Puch AI is a relatively new startup, reportedly about a year old, and said to have annual revenues of under Rs 50 lakh.
While founder Siddharth Bhatia disputed the revenue estimates circulating publicly, he did not disclose the company’s exact financial figures. He also maintained that the project would not involve taxpayer funds and would instead be rolled out in phases with backing from “external investment partners”.
Scepticism deepened as commentators questioned whether the company possessed the financial and operational capacity to deliver on a project of such magnitude.
Puch AI had previously drawn attention for bold claims, including a proposal to acquire Perplexity, a $20-billion AI firm, which further fuelled doubts about its scale and credibility.
A day after the initial backlash, Adityanath reposted his earlier announcement and clarified: “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. MoUs are non-binding on the State Government. Any further progress including any Government permission, approval or license is subject to detailed evaluation of prospective investors proposal . Any prospective investor falling short of the above will automatically have their MoU terminated.”
The controversy unfolded even as Bhatia shared photographs on social media of recent meetings with Defence Minister Rajnath Singh and Commerce Minister Piyush Goyal, projecting growing engagement at high levels.
With the cancellation now formalised, the episode has raised fresh questions about vetting processes and the promotion of large-scale investment commitments in the state’s rapidly evolving technology sector.
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