India’s AI boom is pushing firms to trade on the near-term profitability of users

Tech giants’ efforts to boost AI adoption in India may be about to hit a snag, as companies scrap free upgrades in hopes of turning the world’s fourth-largest economy into a whirlwind of paid subscribers.

India has become the world’s largest market for AI app downloads by 2025, according to market intelligence firm Sensor Tower, extending its lead over the US as installations jumped 207% year-on-year.

Companies including OpenAI, Google, and Perplexity have released extended free offerings to accelerate user growth in a price-sensitive market. Leading AI firms have also supported India in its push to become the world’s artificial intelligence hub. A major AI conference in New Delhi last week was attended by leaders including OpenAI’s Sam Altman, Anthropic’s Dario Amodei, and Alphabet CEO Sundar Photosi – a sign of the country’s growing weight in the global AI race.

Now, some of those early development plans are winding down. Confusion ended its bulk Pro offering with Indian telco Airtel in January, while OpenAI’s free access to ChatGPT Go in India is no longer available, potentially setting the stage for a definitive test of how many newly acquired users convert to paying subscribers.

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

GenAI app adoption in India accelerated through 2025, with downloads increasing in September and October at year-on-year growth rates of 320% and 260% respectively, according to the data. However the increase in consumption has not fully translated into income gains. In November and December 2025, in-app purchases and AI app revenue in India fell 22% and 18% month-over-month, respectively. ChatGPT’s revenue fell even more — down 33% and 32% in the same period after the November launch of free access to sub-$5 ChatGPT Go — showing the immediate impact of aggressive promotional pushes.

ChatGPT still commands more than 60% of GenAI’s in-app revenue in India, meaning a change in its pricing strategy could have a significant impact on overall market performance.

Along with encouragement, Sensor Tower pointed out that the increase in GenAI app adoption in India last year was due to a mix of new product launches, including the launch of platforms such as DeepSeek, Grok, and Meta AI, as well as advances in major chatbots such as ChatGPT, Gemini, Claude, and Perplexity. Widespread interest in AI-generated content has also helped fuel acquisitions, with content creation and editing tools accounting for seven of the 20 most downloaded GenAI apps in India by 2025.

User increase is called equal. India accounts for nearly 19% of the world’s users of leading AI applications by 2025, ahead of the US at 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 following promotional offers. ChatGPT was the most downloaded GenAI app in India and globally in 2025, according to previous Sensor Tower data. Earlier this month, the CEO of OpenAI said that the chatbot now has more than 100 million active users in India.

The promotional campaign in India reflects a broader strategy by AI companies to reduce price friction in an increasingly price-conscious market, betting that early user adoption and engagement will translate into strong long-term retention once the free access period ends, said Sneha Pandey, data analyst at Sensor Tower.

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

However, user engagement in India still lags behind mature markets. By 2025, users of the top AI chatbot apps in the US spend nearly 21% more time per week on apps than their counterparts in India and log in 17% more times on average, per Sensor Tower.

“Revenues in AI applications will likely see significant but gradual growth as users become more deeply integrated into these platforms, making continuous engagement a priority,” Pandey told TechCrunch.

He added that pricing pressure in India is likely to remain high given the country’s new and value-conscious user base, making lower-cost tiers, telecom bundles, and smaller models more important for long-term retention.

ChatGPT remained the clear market leader in India entering 2026, with 180 million active users in January, per Sensor Tower, followed by Google’s Gemini with 118 million, Perplexity with 19 million, and Meta AI with 12 million. The statistics underscore both the scale of India’s AI opportunity and the growing challenge for companies to turn rapid user adoption into sustainable revenue.

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