TLDR: Data collaboration startup Atlan is addressing the ‘AI context gap’ to help enterprises transition artificial intelligence pilot projects into full-scale, real-world applications. The company’s platform creates a unified ‘context layer’ from disparate data, enabling AI systems to better understand business nuances. This initiative comes as AI startups are attracting over 50% of venture funding in 2025, highlighting a significant market opportunity.
In a significant move to accelerate the practical application of artificial intelligence, data collaboration startup Atlan is positioning its platform as a crucial ‘bridge’ for enterprises. The company aims to help organizations overcome the prevalent ‘AI context gap,’ a key factor contributing to the high failure rate of AI pilot projects in the real world.
According to Prukalpa Sankar, cofounder of Atlan and winner of the ET Startup Awards 2025 Woman Ahead category, a Massachusetts Institute of Technology (MIT) report indicates that a staggering 95% of generative AI projects fail at the pilot stage and never reach production. Sankar stated, ‘The challenge lies in what we call the AI context gap.’ This gap refers to the fundamental disconnect between what AI systems are designed to understand and the actual meaning, internal definitions, and workflows within a business. Even with access to relevant data, AI tools often struggle to interpret these critical business nuances.
Atlan’s solution involves creating a ‘context layer’ that stitches together a company’s scattered data and various AI use cases. This unified layer provides a ‘single version of truth,’ allowing AI systems to gain a deeper and more accurate understanding of business context. The company further enhanced its offerings by launching ‘Atlan AI’ in 2023, embedding intelligence across its entire product suite to facilitate this transition.
Sankar emphasized the growing market opportunity, noting, ‘We operate in a category where the problem only gets bigger in the AI era.’ The demand for solutions that ensure AI readiness is driving Atlan’s growth. She also highlighted a broader geopolitical trend, observing that India has historically ‘underinvested in AI research and infrastructure’ compared to leading nations like the United States and China.
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This development at Atlan aligns with a broader trend in the technology sector, where artificial intelligence is rapidly becoming a dominant force. A recent report by CB Insights, also published on October 22, 2025, reveals that AI startups are projected to capture over 50% of total annual venture capital funding for the first time in 2025. As of Q3 2025, AI companies had already secured 51% of the total funding, with overall venture funding across industries exceeding $90 billion for the fourth consecutive quarter, reaching $95.6 billion in Q3 alone. The total annual funding climbed to $310 billion through Q3, marking the highest yearly figure since 2022. The United States continues to lead global AI growth, accounting for 85% of all AI funding and 53% of the total number of deals this year, with the humanoid robot segment emerging as one of the most active markets.
