Hyderabad – BSE-listed Blue Cloud Softech Solutions said on Tuesday it had signed a technology ownership transfer agreement valued at about $150 million ( around ₹1,305 crore) with an Israel-based technology company to co-develop edge AI chips and manufacture semiconductors in India.
The agreement includes a five-year investment plan by Blue Cloud covering technology integration, product development and domestic manufacturing. The plan also involves revenue sharing with the Israeli partner for hardware design transfer and intellectual property rights.
Under the deal, the Israel company will provide core hardware architecture and reference design, while Blue Cloud will develop and own the software stack, including system firmware, AI middleware and application frameworks. The company said this would give it full technology ownership and intellectual property control in India.
The partnership is part of Blue Cloud’s strategy to expand its AI and cybersecurity solutions portfolio into advanced semiconductor design and production.
The Hyderabad-based firm said it was in talks with domestic semiconductor manufacturers to produce the chips locally, ensuring large-scale fabrication and end-to-end integration within India. The company expects the initiative to support existing and future contracts in defence, energy, and industrial automation.
Edge AI platform
The new edge AI semiconductor system will focus on industrial and defence-grade computing applications. The chips are designed to deliver real-time data processing closer to the source, reducing network latency and improving operational security.
Blue Cloud said the system is built around a multi-core hybrid system-on-chip (SoC) architecture that integrates ARM Cortex-A processors with vector digital signal processing (DSP) cores. The platform’s neural processing unit is capable of up to 32 tera operations per second, optimised for deep learning inference.
The design includes LPDDR5 and DDR5 memory support with a throughput of up to 68 gigabytes per second and dual 10G Ethernet connectivity. It also supports 5G New Radio, Wi-Fi 6E, and Time-Sensitive Networking for low-latency industrial communications.
In-built cryptographic protection features include AES-256 encryption, trusted platform module (TPM) 2.0, and secure boot capability with firmware integrity monitoring. The device is engineered for low power consumption, with a thermal design power below 10 watts, and is ruggedised for environments ranging from minus 40°C to 105°C.
Blue Cloud said the chip would also feature an embedded AI-driven perimeter defence system for real-time anomaly detection and native compatibility with supervisory control and data acquisition (SCADA), programmable logic controllers (PLCs), and industrial robotics networks.
Blue Cloud investment and strategic outlook
The five-year plan under the agreement covers the establishment of R&D facilities, infrastructure expansion, and collaborations with Indian semiconductor ecosystems for pilot and commercial-scale production. Blue Cloud said the partnership supports India’s objective to develop domestic semiconductor capabilities and reduce dependence on foreign suppliers.
The company also said the edge AI platform would form the foundation of its upcoming industrial automation and defence projects, including a USD 15 million collaboration with Byte Eclipse for the oil and gas sector. The chips will also be used in new AIoT systems designed for high-performance industrial environments.
Blue Cloud’s chairman, Janaki Yarlagadda, said the agreement represented a significant milestone in the company’s technology roadmap.
Yarlagadda said the collaboration merges Israel’s chip design expertise with Blue Cloud’s experience in AI-driven systems.
“By combining chip design excellence with AI integration, we are creating an edge AI semiconductor platform that will serve industrial, defence, and infrastructure needs across continents,” Yarlagadda said.
Blue Cloud said the project marks an expansion of its presence in the global semiconductor value chain, with both design and software development to be carried out in India. The firm expects this localisation to contribute to technology exports and the creation of skilled engineering jobs.
The company said it continues to explore partnerships with technology firms and manufacturing partners to build its AI hardware and defence electronics capabilities.
Blue Cloud Softech Solutions provides AI-based enterprise, automation, and cybersecurity technologies. The company operates in India, the United Kingdom, the United States, the United Arab Emirates, Israel, France, Singapore and Tanzania. It specialises in industrial automation, AI analytics, and OT cybersecurity for defence and infrastructure clients.
