The AI ​​boom in India is prompting companies to trade their near-term revenues for users

Tech giants’ efforts to boost AI adoption in India may be about to reach a turning point, as companies end free promotions in hopes of converting the world’s fourth-largest economy to an unexpected pool of paid subscribers.

India becomes the world’s largest market for downloads of generative AI apps in 2025, according to market intelligence firm Sensor Tower, extending its lead over the US as installs jumped 207% year-on-year.

Companies including OpenAI, Google, and Perplexity have rolled out expanded premium free offerings to accelerate user growth in the price-sensitive market. Leading AI companies have also supported India in its quest to become a global AI hub. A major AI summit in New Delhi last week was attended by leaders including OpenAI’s Sam Altman, Anthropic’s Dario Amodei, and Alphabet CEO Sundar Pichai — a sign of the country’s growing weight in the global AI race.

Now, some of those early promotions are starting to wind down. Perplexity ended its bundled pro offering with Indian telco Airtel in January, while free access to OpenAI’s ChatGPT Go is no longer available in India, paving the way for a clearer test of how many newly acquired users convert to paid subscribers.

Despite strong growth in downloads, India still generates a disproportionately small share of AI app revenue, accounting for about 1% of in-app purchases even as it leads nearly 20% of global GenAI app downloads, according to Sensor Tower data shared with TechCrunch, highlighting the challenge of monetization in one of the fastest-growing markets in the industry.

GenAI app adoption in India accelerated sharply through 2025, with downloads peaking in September and October at annual growth rates of about 320% and 260%, respectively, according to the data. However, the increase in usage has not fully translated into revenue gains. In November and December 2025, in-app purchase revenue for AI apps in India declined by 22% and 18% month-on-month, respectively. ChatGPT revenue declined more sharply — down 33% and 32% over the same period after launching free access to ChatGPT Go in November for less than $5 — reflecting the near-term impact of aggressive promotional campaigns.

ChatGPT still accounts for more than 60% of GenAI’s in-app revenue in India, which means shifts in its pricing strategy could significantly impact the overall market performance.

Besides promotional campaigns, Sensor Tower attributed the increase in adoption of GenAI in India last year to a combination of new product launches, including the debut of platforms like DeepSeek, Grok, and Meta AI, as well as upgrades to major chatbots like ChatGPT, Gemini, Cloud, and Perplexity. Widespread interest in AI-generated content has also helped drive its adoption, with content creation and editing tools accounting for seven of the 20 most downloaded GenAI apps in India in 2025.

The increase in the number of users was equally evident. India will account for about 19% of the global user base of leading AI assistant apps in 2025, ahead of the US by 10%, Sensor Tower said. ChatGPT continues to dominate the Indian market in terms of monthly active users, although competitors, including Gemini and Google’s Perplexity, have also seen rapid growth after promotions. ChatGPT was the most downloaded GenAI app in India and globally in 2025, according to previous Sensor Tower data. Earlier this month, the OpenAI CEO said the chatbot now has more than 100 million weekly active users in India.

Sneha Pandey, insights analyst at Sensor Tower, said the promotion in India reflects a broader strategy by AI companies to reduce price friction in a highly value-conscious market, betting that early adoption and engagement by users will translate into stronger long-term retention once free access periods end.

India’s appeal lies in its huge digital base. The country has more than 1 billion internet users and nearly 700 million smartphone owners, making it one of the largest potential markets for AI services globally and a crucial battleground for user growth.

However, user engagement in India still lags behind more mature markets. In 2025, users of leading AI chatbot apps in the US spent about 21% more time per week on the apps than their counterparts in India and logged 17% more sessions on average, per Sensor Tower.

“In-app AI revenue is likely to see a tangible but gradual improvement as users become more deeply integrated into these platforms, making sustained engagement paramount,” Pandey told TechCrunch.

Pricing pressure in India is likely to remain high given the country’s young and value-conscious user base, making low-cost tiers, telecom bundles and micro-transaction models important to retain in the long term, it added.

ChatGPT remained a clear market leader in India going into 2026, with 180 million monthly active users in January, per Sensor Tower, followed by Google Gemini with 118 million, Perplexity with 19 million, and Meta AI with 12 million. These numbers underscore the scale of AI opportunities in India and the growing challenge that companies face to convert rapid user adoption into sustainable revenues.

Google, OpenAI, and Perplexity did not respond to requests for comment.