Fidelity Investments has significantly reduced its valuation of Gupshup, a San Francisco-based conversational messaging software provider, by over 80% to $278 million as of January 31, 2026. This markdown comes after Gupshup was valued at $1.4 billion during Fidelity's initial investment in 2021. The valuation has been steadily revised downwards, from $697 million in July 2023. Gupshup, which focuses on AI-driven messaging solutions, raised $60 million in equity and debt financing last July but did not disclose its valuation at that time. The company aims to expand its operations in high-growth regions, including India, the Middle East, South America, and Africa, and is considering relocating its headquarters to India for a potential listing. However, Gupshup has faced operational challenges, including a 5% revenue decline in its India unit, which constitutes 60% of its revenue, and a 52% drop in net profit. The ongoing churn in its business led to the layoff of 300 employees as part of a restructuring effort. The markdown reflects a broader trend where traditional software companies are being re-evaluated due to the rise of AI-based solutions, impacting valuations across the sector.