UP govt scraps Rs 25,000-crore MoU with Puch AI: ‘Firm lacks net worth, financial linkages’
Two days ago, Chief Minister Yogi Adityanath had issued a clarification, emphasising that the agreement was only a preliminary step and not a final commitment.
Days after a social media post raised questions on a Rs 25,000 crore Memorandum of Understanding (MoU) with Puch AI, the Uttar Pradesh government on Thursday cancelled the agreement, saying a review revealed a “lack of adequate net worth” of the company and “absence of credible financial linkages”.
Officials on Thursday said the decision to scrap the MoU was made after a standard protocol review of the agreement that was signed on March 23.
“Necessary details as per the standard operating protocol were sought from the investor, but they failed to provide them within the stipulated time. The due diligence process further revealed a lack of adequate net worth and absence of credible financial linkages required for a project of this scale, leading to the decision to cancel the MoU,” a statement issued by the UP government read.
“On directions of the state government, the MoU stands cancelled with immediate effect. No rights or obligations remain,” it added, underlining that the move was taken in the interest of transparency and maintaining the highest standards of probity in governance.
The now-cancelled MoU had been projected as a major investment in the artificial intelligence space, aligning with the state’s broader push to position itself as a hub for emerging technologies. However, officials maintained that adherence to due process remains paramount and any proposal failing to meet established norms would not be pursued.
The government reiterated that while it remains open to investments, projects must meet financial credibility and transparency benchmarks before being approved or implemented.
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Following a post from the CM’s X handle on Monday highlighting the scale and ambition of the proposed investment, several users on X were quick to add a community note to the post, questioning the startup’s capacity, noting its relatively small scale, and raising concerns about its execution capability.
On Tuesday, Siddharth Bharia, the co-founder of Puch AI, which describes itself as “India’s first AI assistant”, had posted: “The MoU signed with the UP Government is structured as a public-private partnership. It does not involve any cost to the taxpayers of Uttar Pradesh. On the contrary, it brings investment into the state. The project will be executed in phases, with support from external investment partners.”
Maulshree Seth is an Assistant Editor with The Indian Express, based in Lucknow. With over 15 years of experience in mainstream journalism, she has built a formidable reputation for her on-ground reporting across Uttar Pradesh. Her expertise spans a wide array of critical beats, including state politics, governance, the judiciary, and rural development.
Authoritativeness Maulshree’s work is characterized by depth and historical context. Her coverage of high-stakes state elections and landmark judicial rulings has established her as an authoritative voice on the intersection of law and politics in Northern India. She is frequently recognized for her ability to gain access to primary sources and for her nuanced understanding of the socio-economic factors that drive the world's most populous sub-national entity.
Trustworthiness & Ethical Journalism Her reporting is rooted in rigorous fact-checking and a steadfast dedication to neutral, unbiased storytelling. By prioritizing field-based verification—often traveling to the most remote corners of the state—she ensures that her readers receive a truthful and comprehensive view of events. ... Read More
