Mohalla Tech to invest Rs 100 crore in AI driven micro drama push

MUMBAI: Looks like India’s next binge-watch won’t need a film set, just a smart algorithm and a spark of AI. Mohalla Tech is doubling down on AI-generated micro dramas, announcing plans to invest up to Rs 100 crore over the next year as it looks to scale production, hire AI talent and cement its lead in India’s fast-growing short-form entertainment market.

The parent company of ShareChat, Moj and Quick TV said the investment follows a major milestone for its content ecosystem, which now records 850 million daily episodic video plays equivalent to more than 680 million minutes, or over 1,300 years of content consumed every day. That figure has more than doubled in the past six months, with the company expecting daily episodic plays to cross one billion in the coming quarter.

The surge reflects the rapid rise of vertical micro dramas in India. Introduced on the subscription-based Quick TV in 2025 before expanding to the ad-supported Moj and ShareChat, the format has significantly boosted user engagement. Daily time spent per user has doubled on Moj and risen 35 per cent on ShareChat, while the exposure-to-engagement ratio has climbed from around 45 per cent to over 74 per cent.

Audience stickiness has also increased sharply. The average number of episodes watched per user each day has jumped from 20 to more than 80, marking a 300 per cent increase as viewers embrace serialised short-form storytelling.

Mohalla Tech said its ecosystem now reaches around 70 million monthly active users of micro dramas roughly 70 per cent of India’s estimated 100 million consumers of the format. The company attributes much of that scale to its proprietary AI-powered recommendation engine, which personalises content discovery at scale.

Beyond recommendations, artificial intelligence is increasingly moving behind the camera. Mohalla Tech has rolled out AI-assisted production workflows and is expanding hiring for specialists in AI-generated video, reducing production costs by around 40 per cent compared with conventional live-action shoots by cutting reliance on large crews, physical locations and complex scheduling.

AI-generated titles currently account for about 10 per cent of the company’s micro-drama catalogue, but that share is expected to rise to 30-40 per cent by the end of 2026, subject to audience response and continued improvements in production economics.

While live-action content still delivers stronger engagement, the performance gap is narrowing. The company said its latest AI-generated series recorded an Episode 20 completion rate of nearly 50 per cent, compared with around 60 per cent for live-action productions, as advances in AI-generated visuals improve viewer retention.

The economics are also changing rapidly. Traditional Indian micro-drama productions typically cost around Rs 15-20 lakh per series. Mohalla Tech said its long-term goal is to reduce production costs by around 70 per cent through AI, creating room for higher margins while enabling faster experimentation and greater content volume.

The company is also looking to monetise the format beyond subscriptions and advertising by integrating brands into AI-generated stories. Those opportunities will be showcased at ShareChat’s Culture Intelligence Summit, where marketers will be introduced to new AI-driven branded content formats.

As part of the expansion, Mohalla Tech is preparing to release six AI-led micro dramas in the first week of August across genres including mythology, thrillers, science fiction and action, with plans to add six to 10 new AI titles every month thereafter. The strategy signals that, for India’s next generation of bite-sized entertainment, algorithms may soon share top billing with actors.