In a world where venture capitalists are throwing money at artificial intelligence (AI) like it’s going out of style, Nexus Venture Partners is taking a refreshingly cautious approach with its new $700 million fund. But let’s not get too excited,while half of that capital is earmarked for the AI craze, the firm is also focusing on safer, India-centric ventures in consumer goods, fintech, and digital infrastructure. Is this a smart strategy or just fear of missing out?

AI has become the shiny object that every venture capital firm is scrambling to invest in, chasing what they think will be the next big thing. Yet, Nexus is waving a red flag, claiming that pouring all their resources into one overheated category could backfire spectacularly. The firm is championing India’s expanding digital economy as a safer bet, presenting a buffet of opportunities as the AI hype train rolls on.

Founded in 2006 and based in Delaware, Nexus operates with a cross-border strategy that’s meant to make them look more savvy than your average VC. With offices in Menlo Park, Mumbai, and Bengaluru, they tout an integrated U.S.-India team that allows them to dip their toes into both early-stage software and India-focused startups with aplomb.

Their U.S. portfolio flaunts a collection of trendy names like Postman and Apollo, while their Indian investments range from consumer goods to logistics. Sure, they want you to believe they’re diversified, but really, are they just hedging their bets in a tumultuous market?

“AI is a huge inflection point, and we are anchoring on that,” boasted Jishnu Bhattacharjee, a managing partner at Nexus in the U.S. But is anchoring enough when the waves are as tumultuous as they are now? He claims many AI innovations are designed to benefit the masses, but one has to wonder if they’re just trying to ride the wave without getting wiped out.

Nexus manages a whopping $3.2 billion across its funds and has invested in over 130 companies, claiming more than 30 exits, including IPOs. It’s all about that long-term strategy, but are they really just cashing in on the hype?

Abhishek Sharma, another managing partner, insists that they focus on inception to seed and Series A funding, starting with investments as low as a few hundred thousand dollars. They’ve kept their fund size at $700 million, stating it’s the “optimal” amount for their strategy. Sounds like a convenient excuse to sidestep the pressure of raising more money?

While it’s true that India’s AI scene may lag behind the U.S., Nexus believes the country could leapfrog into the future, citing a vast talent pool and an improving digital infrastructure. But can they really compete with the global leaders, or are they just blowing smoke?

Nexus points to companies like Zepto as shining examples of AI success in India, showcasing how AI is supposedly evolving in the region. But is this really indicative of a thriving ecosystem, or just isolated cases that make for a good story?

Despite not disclosing specific fund metrics, Nexus claims their funds have been yielding significant returns, primarily funded by returning limited partners from around the globe. But what about transparency? Are the returns as impressive as they claim, or is it just hype?

As the venture capital game continues to shift, Nexus Venture Partners is positioning itself as a cautious player in the cutthroat AI investment landscape.