According to Tracxn, the number of AI-native startups in India surged from 182 in 2022 to 465 by 2025, with current figures at 246. Despite the shift towards paid pilots, most contracts remain limited in scope, with over half of new engagements starting as proof-of-concepts. Experts highlight that while some startups successfully convert pilots into annual contracts, many continue to offer free trials to establish credibility. The competitive landscape is expected to lead to consolidation and shutdowns, as startups face challenges in transitioning from pilot projects to production deployments amidst evolving technology and market dynamics.