Bengaluru/Mumbai, June 11 -- India's venture capital funding has started shifting to startups with core products built on artificial intelligence (AI) from ventures that offer cloud-based software applications, marking a deeper reset in investor priorities. Between January and 4 June, AI-native startups raised $454 million across 65 deals, surpassing software as a service (SaaS) firms, which drew $432 million over 52 deals, according to data from Venture Intelligence. Some overlap exists as SaaS companies adopt AI features. "AI-led startups are commanding 3-4x valuation premiums over traditional SaaS businesses, thanks to their potential for faster scalability and deeper, more transformative use cases," said Abhinav Chaturvedi, partner at Accel. The trend is pushing established SaaS companies to retool quickly. Many of them are now streamlining operations and aggressively investing in artificial intelligence, according to multiple industry executives. "If SaaS companies don't integrate AI, they are unlikely to survive the next 2-3 years," said Nitin Bhatia, managing director at DC Advisory. "We're seeing the switch happen where pure-play SaaS startups don't exist anymore. AI is becoming a fundamental part of what they offer-whether it's to enhance customer experience or product capabilities." This transition is also shaping the investment strategies of venture capital firms such as Stellaris Venture Partners, Bessemer Venture Partners, and Accel, who see the convergence of AI and SaaS playing out across their portfolios. Legacy players are not just adapting but helping shape this transformation. Accel's Chaturvedi pointed to SaaS portfolio companies like Chargebee, which is exploring newer monetization models like usage-based pricing; and BrowserStack and Testsigma, which are embedding AI to automate testing. Some of the largest AI-linked fundraises this year include Netradyne's $90 million, SpotDraft's $54 million, and Infinite Uptime's $35 million rounds....