The Uttar Pradesh government has cancelled its ₹25,000 crore Memorandum of Understanding (MoU) with Bengaluru-based startup Puch AI after a detailed review raised financial concerns. The agreement, signed on March 23, aimed to boost artificial intelligence infrastructure in the state.
Due diligence flags financial gaps
Officials said the startup failed to provide required financial details within the given timeline. A review found that the company lacked sufficient net worth and credible financial backing to execute a project of such scale.
Decision taken for transparency
The state government stated that the MoU was cancelled following standard protocols and in the interest of transparency and good governance. Authorities clarified that no obligations remain after the termination.
Deal faced scrutiny within days
The proposed project included AI parks, data centres and an AI university, but it faced criticism due to the startup’s limited track record. The cancellation comes just days after the agreement was announced.