Zoho courts the enterprise CIO with its own LLM and agentic AI stack

Time of India

19-07-2025

Zoho
, a Chennai-headquartered SaaS company, has entered the foundational model arena with the launch of its proprietary
large language model
,
Zia LLM
. The announcement, made on the sidelines of its annual Zoholics India conference in Bengaluru, signals a growing ambition to deepen its AI footprint—while maintaining its hallmark focus on privacy and affordability.
'The announcement emphasises Zoho's long-standing aim to build foundational technology focused on the protection of customer data, breadth and depth of capabilities because of the business context, and value,' said Mani Vembu, CEO of Zoho. 'Our LLM model is trained specifically for business use cases, keeping privacy and governance at its core, which has resulted in lowering the inference cost, passing on that value to the customers, while also ensuring that they can utilise AI productively and efficiently.'
How can Zoho's move into building its own LLM be viewed then: A bid for strategic differentiation, or a necessary pivot as enterprises demand more sovereignty and cost control over AI? Arun Chandrasekaran, Distinguished VP Analyst at Gartner, framed it as the former. 'The move is aimed at creating a differentiation for business use cases, targeting efficiency and privacy for customers who can't afford or don't want to rely on large external LLM providers,' he said.
A right-sized, In-house stack
Built fully in-house and trained using NVIDIA's AI-accelerated computing platform, Zia LLM comprises three model sizes—1.3 billion, 2.6 billion, and 7 billion parameters. Each is optimized separately for distinct business contexts such as structured data extraction, summarisation, retrieval-augmented generation (RAG), and code generation.
This tiered model strategy enables Zoho to balance performance and compute efficiency across user scenarios, a principle the company refers to as 'right-sizing.' It also gives Zoho the flexibility to scale Zia LLM gradually; the first round of parameter increases is expected by the end of 2025.
'By building its own
AI stack
, Zoho is hoping to appeal to businesses that care about domain-specific AI, AI integrated into business workflows while simultaneously being sovereign and cost efficient,' Chandrasekaran said.
To that end, Zoho has launched a Model Context Protocol (MCP) server that opens its library of workflow actions to third-party AI agents. While customers can still integrate with external models like ChatGPT, Llama, and DeepSeek, Zia LLM gives them the option to keep their data within Zoho's environment—benefiting from the latest AI capabilities without sending sensitive information to third-party clouds. The model is now deployed across Zoho data centers in the U.S., India, and Europe.
Building agents without code
The company also debuted Zia Agent Studio, a no-code platform that lets businesses create AI agents embedded directly within Zoho applications. More than 25 pre-built agents are already available, including several tailored for Indian businesses.
'Our differentiation comes from offering agents over our low-code platform so that there is a human in the loop for verification and modification. It is much simpler to verify and make changes in the UI screen than reading the code,' Vembu said.
These agents work across business functions. For instance, a Customer Service Agent in Zoho Desk can process customer queries, respond to common issues, or route complex requests to a human agent. Meanwhile, Zoho's AI assistant, Ask Zia, enables interactive conversations to build reports, analyse data, and assist data teams in creating machine learning models.
Zoho also launched India-specific agents that can verify documents like PAN, Voter ID, Udyog Aadhar, GSTIN, Driving Licences, and utility bills—targeting use cases in HR and financial services, such as employee background verification or onboarding checks.
Eyeing the enterprise, quietly
While Zoho has long positioned itself as a champion of small and mid-sized businesses, its expanding AI stack, with built-in governance and observability tools, may signal broader ambitions.
'While Zoho will remain committed to SMBs, its AI platform capabilities, governance tooling, and agentic capabilities suggest it is testing the waters for enterprise traction. Perhaps they are eyeing upmarket expansion without abandoning affordability,' Chandrasekaran said.
That shift could mean rethinking pricing, too. As CIOs evaluate Zoho's AI agents and LLM stack for enterprise deployment, traditional SaaS models may not apply, Chandrasekaran noted:
'CIOs will scrutinize
data privacy
, extensibility, grounding mechanisms, observability, and interoperability, especially with existing enterprise data and APIs. Also, Agentic AI is giving rise to new pricing models that can potentially challenge the seat-based pricing model of SaaS. How well Zoho can embrace new pricing models (such as usage-based or outcome-based pricing) will be critical for its success with CIOs.'