India’s AI Growth Spurs Focus on User Acquisition Over Revenue Generation
As India’s artificial intelligence landscape evolves, tech giants are shifting their attention from free promotions to strategies aimed at converting users into paying subscribers. This pivot follows a remarkable surge in generative AI app downloads, with India emerging as the leading market globally in 2025, outpacing the U.S. with a staggering 207% year-over-year increase, as reported by market intelligence firm Sensor Tower.
Major players, including OpenAI, Google, and Perplexity, initially launched extended free premium offerings to tap into India’s price-sensitive audience. This effort aligns with the country’s ambition to establish itself as a central hub for artificial intelligence, highlighted by a recent AI summit in New Delhi featuring influential leaders such as Sam Altman of OpenAI and Sundar Pichai of Alphabet.
However, the time of free access is coming to an end. In January, Perplexity discontinued its bundled Pro offer with Airtel, and OpenAI has phased out free access to ChatGPT Go in India. These changes will provide crucial insights into the conversion rates of newly acquired users to paid subscribers.
Despite a marked increase in app downloads, revenue from in-app purchases for AI applications saw a decline of 22% and 18% in November and December 2025, respectively. ChatGPT, which holds over 60% of the in-app revenue market in India, experienced an even sharper revenue drop due to the introduction of low-cost subscription options.
Key Drivers of AI Adoption
The rapid escalation in generative AI app usage can be attributed to new product introductions, including platforms like DeepSeek and upgrades to existing chatbots such as Gemini and Claude. The viral nature of AI-generated content has also driven growth, with seven of the top 20 downloaded GenAI apps in India related to content creation and editing.
India currently constitutes approximately 19% of the global user base for leading AI assistant applications, outpacing the U.S. at 10%. ChatGPT remains the most downloaded app in both India and worldwide, with OpenAI reporting over 100 million weekly active users in the country.
Analysts note that the promotional strategies employed in India illustrate a broader intent among AI firms to minimize pricing barriers in a market characterized by value-conscious consumers. The hope is that this early user engagement will yield increased long-term retention once free access ends. With over a billion internet users and 700 million smartphone owners, India presents one of the largest markets for AI services worldwide.
Nonetheless, user engagement remains lower in India compared to more established markets. In 2025, U.S. users of leading AI chatbot apps spent approximately 21% more time weekly and logged 17% more sessions than their Indian counterparts.
As the competitive landscape continues to evolve, with ChatGPT leading the market with 180 million monthly active users in January 2026, followed by Google’s Gemini and Perplexity, the challenge lies in successfully converting rapid user adoption into sustainable revenue streams.
