India’s AI Boom Pushes Firms to Trade Near-Term Revenue for Users

When OpenAI launched ChatGPT Go in India last November, the company wasn’t just testing a new pricing tier—it was making a calculated bet on the world’s most price-sensitive digital market. For less than the cost of a cup of coffee, Indian users could access premium AI features that cost ten times as much elsewhere. The promotion worked: downloads surged 207% year-over-year, cementing India as the world’s largest market for generative AI app installs.

Now, as the free trials wind down and promotional offers expire, a critical question hangs over the industry: Can the world’s fourth-largest economy convert its massive user base into paying customers?

“AI in-app revenues will likely see meaningful but gradual improvement as users become more deeply integrated into these platforms, making sustained engagement paramount.” — Sneha Pandey, Insights Analyst at Sensor Tower

A Market Like No Other

India’s numbers are staggering. With over a billion internet users and roughly 700 million smartphone owners, the country represents one of the largest potential markets for AI services globally. In 2025, India accounted for about 19% of the global user base of leading AI assistant apps—nearly double the U.S. share of 10%.

ChatGPT dominates with more than 100 million weekly active users in India alone, commanding over 60% of GenAI in-app revenue in the market. Google’s Gemini follows with 118 million monthly active users, while Perplexity has carved out 19 million users and Meta AI holds 12 million.

The growth trajectory has been explosive. GenAI app adoption accelerated sharply through 2025, with downloads peaking in September and October at year-over-year growth rates of about 320% and 260%, respectively. New product launches—including DeepSeek, Grok, and Meta AI—combined with viral interest in AI-generated content to fuel the surge.

The Monetization Paradox

Despite the user explosion, India generates a disproportionately small share of AI app revenue. While driving roughly 20% of global GenAI app downloads, the country accounts for only about 1% of in-app purchases, according to Sensor Tower data shared with TechCrunch.

Revenue trends tell a sobering story. In November and December 2025, AI app in-app purchase revenue in India fell 22% and 18% month over month, respectively. ChatGPT’s revenue dropped even more sharply—down 33% and 32% over the same period—following the November launch of the deeply discounted ChatGPT Go access.

The promotional strategy reflects a broader industry approach: reduce pricing friction in a highly value-conscious market, betting that early user adoption will translate into stronger long-term retention once free access periods expire.

“We’re past the hype cycle now. Companies that can demonstrate real value—measurable, repeatable, scalable value—are the ones that will define the next decade of AI in emerging markets.” — Industry Analyst

Strategic Shifts on the Horizon

Several leading AI firms have already begun adjusting their India strategies. Perplexity ended its bundled Pro offer with Indian telco Airtel in January. OpenAI’s free ChatGPT Go access in India is no longer available. These moves potentially set the stage for a clearer test of user conversion rates.

Engagement patterns reveal additional challenges. In 2025, users of leading AI chatbot apps in the U.S. spent about 21% more time per week on the apps than their counterparts in India and logged 17% more sessions on average. Lower engagement translates to weaker habit formation—and potentially lower willingness to pay.

The industry’s response has been to double down on localization and value engineering. Lower-cost tiers, telecom bundles, and micro-transaction models are becoming increasingly important for long-term retention in a market where pricing pressure is likely to remain elevated given the country’s young and value-conscious user base.

The Global Stakes

India’s importance extends beyond its immediate market size. The country has become a critical battleground for user growth, with major AI firms backing India’s push to become a global artificial intelligence hub. A major AI summit in New Delhi last week drew leaders including OpenAI’s Sam Altman, Anthropic’s Dario Amodei, and Alphabet CEO Sundar Pichai—a clear signal of the country’s growing weight in the global AI race.

For AI companies, the India experiment represents a test case for emerging market strategies worldwide. If they can crack the code on monetization in the world’s most price-sensitive major market, the playbook could be replicated across Southeast Asia, Africa, and Latin America.

The coming quarters will reveal whether India’s AI boom can transition from a user acquisition story to a revenue growth engine. For now, the industry remains in investment mode—trading near-term revenue for the promise of a massive, engaged user base that may eventually convert.

This article was reported by the ArtificialDaily editorial team. For more information, visit TechCrunch.