As AI Scales in 2026, Integration and Security Take Center Stage According to Experts The sector is being defined by less speculative model-building and more by deployment, defensibility, and real-world integration.

As 2025 draws to a close, India's artificial intelligence (AI) ecosystem has entered a more deliberate, infrastructure-led phase, according to some experts. The sector is being defined by less speculative model-building and more by deployment, defensibility, and real-world integration.

After two years of exuberant experimentation, capital is now flowing toward AI companies that can embed intelligence into regulated industries, physical systems, and enterprise workflows. AI-focused startups in India attracted an estimated USD 5 billion in funding in 2025, accounting for roughly 30-35 per cent of total venture capital deployed during the year. Early-stage deals dominated by volume, but nearly 60 per cent of capital value flowed into Series B and later rounds, signalling investor preference for scale-ready platforms over experimental labs.

This shift is reflected not just in founder behaviour, but in how venture capital, corporate investors, and global strategic partners are allocating capital across the Indian market.

Boundless' portfolio offers a view into where Indian AI is headed next: SuperHealth, a healthcare startup rebuilt from first principles, Armatrix, which does industrial robotics, Piersight ocean intelligence, Knot: AI-native fashion discovery, Alter, which offers secure access-control for autonomous agents, Aspera, an amphibious aircraft for logistics and defense, Shram (AI agents for knowledge work), plus two stealth consumer AI companies.

Natasha Malpani, Founder of Boundless Ventures, stated that 2025 marked the year intelligence met reality. AI stopped being a theory and started behaving like infrastructure.

"Smaller, retrieval-grounded models replaced trillion-parameter giants. Video-reasoning systems like GPT-4o and Gemini began linking perception to prediction. Physical AI (inspection drones, maintenance robots, and edge-inference chips) proved that intelligence now lives inside machines, not dashboards. The next phase is smarter integration, not smarter models. 2026 will be about persistent memory, causal multimodality, on-device reasoning, and agents that can explain their own decisions. The frontier is the coordination between models, hardware, and human behavior," said Malpani.

Cloudflare's Chief Security Officer, Grant Bourzikas, has been closely tracking the evolution of AI, cybersecurity, and enterprise IT, identifying where the real inflection points lie. Looking ahead to 2026, Grant said he sees a definite shift in how cyber threats are launched, how security teams must respond, and how organizations rethink their security investments.

"In 2026, AI will shift from an attacker's "helper" to an autonomous force multiplier, fundamentally rewiring how cyberattacks work. The past year was filled with AI's contributions to basic malicious activities like social engineering, deepfakes, business email compromise, and more. While this will continue as a baseline for threat actors, 2026 will be the year of real AI attacks. Threat actors will predominantly shift to launch malicious campaigns through vibe coding – exacerbating the speed and delivery of execution. They will increasingly use AI as a teacher or trainer to help them do reconnaissance, but not because they don't know how to launch a low-level attack," said Bourzikas.

He added that this reconnaissance will enable them to gather critical information about a target and create the specialized tools needed for scanning and exploitation. This attacker-AI synergy will slash learning time and propel the automated construction of hyperscale cyber operations to new heights.

"In 2026, one of the largest barriers to securing an organization will be wasted budget on tech that is old and antiquated. For most organizations, negotiating the renewal of security vendors is increasingly expensive and one of the biggest headaches that CISOs face. Software inflation is at an all-time high, which now points towards hefty increases in renewal rates for 2026… but are the tools we renew even necessary to combat today's threat actors? Price and year-over-year increases are often not indicative of any additional value added to the tools and services a vendor provides. As the attack surface grows – with novel vulnerabilities discovered daily, alongside emerging threat actor groups, tactics, and malware – CISOs must focus on eliminating tools that pose risks vs. adding additional tools to address risks," said Bourzikas.