Lucknow, March 24 – The Uttar Pradesh government issued a detailed clarification on Tuesday regarding the Memorandum of Understanding (MoU) signed between Invest UP and startup Puch AI, following growing scrutiny over the firm's financial and operational capacity to execute a project of significant scale.
Uttar Pradesh Chief Minister, Yogi Adityanath, posted on the social media platform X, stating that such MoUs are only preliminary arrangements and do not guarantee final approval or execution of projects.
The clarification comes amid discussions highlighting that Puch AI is a relatively young startup, reportedly around a year old, with an annual revenue of less than Rs 50 lakh. Observers have questioned whether the company possesses the necessary infrastructure, experience, or financial strength to undertake large-scale commitments typically associated with state-backed investment agreements.
Adding to the skepticism, the startup's founder has previously been in the spotlight for viral and unconventional claims, including a widely-discussed proposal to acquire Artificial Intelligence (AI) firm Perplexity, which has been valued at approximately $20 billion.
Addressing these concerns, the Chief Minister reiterated that an MoU signed through Invest UP serves merely as an entry point for engagement and exploration of potential opportunities in emerging sectors such as AI.
"An MoU by Invest UP is a preliminary step before detailed due diligence and project evaluation gets done," the post stated.
It further clarified that the agreement with Puch AI is part of the state's broader effort to explore innovation-driven investments and does not imply endorsement or final approval of any project proposal.
Importantly, the government emphasised that MoUs are non-binding on the state. Any further progress — including approvals, licenses, or permissions — will be subject to rigorous scrutiny and evaluation of the investor's proposal, financial health, technical capability, and long-term viability.
The statement also made it clear that any prospective investor failing to meet the required standards during this process would have their MoU automatically terminated.
Reaffirming its policy stance, the Uttar Pradesh government said it remains committed to ensuring transparency, accountability, and responsible development, particularly in high-growth sectors like AI, while safeguarding public interest through strict due diligence mechanisms.