Cognizant in talks for potential stake in Sarvam AI at $4 billion valuation

Cognizant Technology Solutions is currently in talks to acquire a minority stake in Indian AI startup Sarvam AI. The proposed investment, which aims to raise approximately $300 million for the Bengaluru-based company, would double its valuation to between $3.5 billion and $4 billion, according to industry reports.

This move aligns with broader efforts by major IT service providers to integrate generative AI into their service models. Cognizant CEO Ravi Kumar has previously signaled the company’s intent to pivot toward an AI-centric business strategy, focusing on outcome-based platforms rather than traditional effort-based billing. If the deal proceeds, Cognizant would become the second major IT service firm on Sarvam’s cap table, following HCLTech’s $150 million investment in June 2026.

Founded in 2023, Sarvam AI focuses on developing foundational models and infrastructure tailored for Indian languages and local data security requirements. Its current client roster includes major financial institutions such as the Life Insurance Corporation of India and SBI Life. The company has recently expanded its reach by securing a framework agreement with the Indian Ministry of Defence for military-focused AI projects.

Discussions between the two parties remain ongoing, and neither company has officially confirmed the transaction. Should the funding round close, it would mark a significant valuation milestone for the startup, which reached unicorn status earlier this year.