India’s AI boom pushes firms to trade near-term revenue for users

The AI industry's land-grab phase in India is entering a critical monetization test. After a year of aggressive user acquisition where India became the world's largest market for generative AI app downloads—seeing a 207% year-over-year install jump in 2025—companies like OpenAI, Google, and Perplexity are winding down free promotions. Key offers, like OpenAI's free ChatGPT Go access and Perplexity's bundled Pro deal with Airtel, have ended, setting the stage to see if massive adoption translates into sustainable revenue. This shift follows a major AI summit in New Delhi attended by leaders like Sam Altman and Sundar Pichai, signaling India's strategic importance despite its current revenue contribution lagging far behind its user share.

Technical data from Sensor Tower reveals the core challenge: India drives roughly 20% of global GenAI app downloads but accounts for only about 1% of in-app purchase revenue. This disconnect was exacerbated by promotional pushes; following the launch of free ChatGPT Go access in November 2025, ChatGPT's in-app revenue in India fell sharply by 33% and 32% in November and December. The surge, fueled by new entrants like DeepSeek and Grok and viral AI content tools, has not translated to gains. Now, with ChatGPT commanding over 60% of India's GenAI revenue, its pricing strategy will heavily influence the market's evolution as firms pivot from subsidized growth to proving their long-term business model in a value-conscious economy.