The Uttar Pradesh government, led by Chief Minister Yogi Adityanath, has cancelled a ₹25,000-crore memorandum of understanding (MoU) with AI startup Puch AI, citing concerns over the company’s financial credibility.
Decision after due diligence
According to the state government, the MoU was scrapped following a detailed review conducted under standard protocols. Officials said the company failed to provide necessary financial details on time.
The government stated that due diligence revealed:
- Lack of sufficient net worth
- Absence of credible financial linkages for a project of such scale
As a result, the agreement has been cancelled with immediate effect, and no rights or obligations remain between the parties.
Transparency and governance cited
The decision was taken in the interest of maintaining transparency and ensuring high standards of governance. The MoU had earlier attracted criticism regarding the startup’s credentials, prompting closer scrutiny by authorities.
Company’s earlier stance
Puch AI’s co-founder and CEO, Siddharth Bhatia, had previously maintained that the company was “well-funded” and that the proposed project was structured as a public-private partnership.
He had also clarified that:
- The project would not involve taxpayer money
- Investments would come from external partners
- Implementation would be carried out in phases
Outcome
Despite these assurances, the state government concluded that the financial backing was inadequate for the scale of investment proposed, leading to the cancellation of the deal.