Eternal, the parent company behind quick commerce giant Blinkit, is making a high-stakes entry into the artificial intelligence sector with the planned global launch of dark.ai, a privacy-focused AI assistant. This new venture is described by management as a "zero one bet," signifying its potential to either become a global success or be shut down entirely.
Introducing dark.ai: A Privacy-First AI Assistant
Positioned to launch globally this year, dark.ai is designed as a consumer AI chatbot emphasizing user privacy. According to Eternal’s Q2 FY27 shareholder letter, dark.ai will run fine-tuned open-weight models on the company’s own servers, employing end-to-end encryption for conversations. A unique encrypted memory layer allows context to be carried across sessions, with users retaining full control over their data. Eternal explicitly states it cannot read these conversations, even under duress.
Initially, dark.ai is targeting "power users" such as founders, researchers, scientists, enterprises, and governments who prioritize data privacy. While currently priced for this niche, management has hinted at a potential future expansion to become "a product open for all." This move places Eternal in an increasingly competitive landscape, alongside existing privacy-first AI assistants like Confer from Signal's founder Moxie Marlinspike and Lumo from Proton.
The "Zero One Bet" and Financial Strategy
Despite the ambitious global aspirations for dark.ai, Eternal has disclosed minimal details regarding its budget, capital expenditure plans, or dedicated leadership. Spending related to the project is currently booked under the "Others" segment, with management stating it's "not very meaningful at this stage." This lack of transparency leaves shareholders without clear metrics to assess the scale of the investment or the safeguards in place.
However, Eternal assures investors of its capacity to fund such ventures, citing substantial cash reserves of Rs 16,475 crore. The company indicated a strategic leaning towards technology over services, aligning with co-founder Deepinder Goyal's earlier sentiment that high-risk ideas might best be pursued outside Eternal’s core operations.
Blinkit's Evolving Quick Commerce Landscape
While dark.ai represents Eternal’s bid for digital attention, its quick commerce arm, Blinkit, continues to be a significant, albeit maturing, part of the business. Blinkit's revenue nearly doubled year-on-year to Rs 19,152 crore, accounting for over 77% of Eternal’s adjusted revenue and nearly five times the food delivery business. Its Net Order Value (NOV) grew 79% year-on-year to Rs 20,940 crore.
However, NOV growth has seen a quarterly deceleration for a year, prompting Eternal to expand its physical footprint. Blinkit added 308 new stores in the quarter, bringing its total network to 2,751, with plans to reach 3,500 by March 2027 and approximately 5,000 by March 2028. This expansion focuses increasingly on smaller cities, where competition is perceived as less intense and customer retention is higher.
Despite impressive growth, Blinkit's margins remain thin. The adjusted EBITDA for the quarter was Rs 184 crore, representing just 0.9% of NOV, far below the company's steady-state target of 6%. Approximately 30% of NOV still originates from cities that are not yet EBITDA-positive. Blinkit has also opted against a private-label push, a strategy that differentiates it from rivals like Swiggy Instamart and Zepto.
CEO Albinder Dhindsa anticipates a convergence of quick commerce and traditional e-commerce, aiming to fulfill most household purchases within 10 minutes. "For most purchases, if price and choice are similar, customers prefer to get things sooner," Dhindsa noted, highlighting the focus on supply chain efficiency and profitability.
Eternal's Q2 FY27 Financial Performance
Eternal's overall financial results for Q2 FY27 showed a 92% increase in net profit to Rs 125 crore year-on-year, though this missed brokerage estimates. Revenue from operations surged 78% year-on-year to Rs 24,138 crore, exceeding expectations, and adjusted EBITDA nearly tripled to Rs 666 crore. The tax charge significantly increased as the parent company's carried-forward losses were exhausted, impacting profit growth. Following the earnings call, the company’s stock experienced a decline of over 2%.
In essence, while Blinkit continues to be Eternal’s established and dominant bet on capturing a larger share of the household shopping basket, dark.ai represents its ambitious, albeit opaque, gamble on securing users’ digital attention in the burgeoning AI landscape.