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

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

Tech giants’ efforts to ramp up AI adoption in India could also be about to hit a turning point, as firms end free promotions with hopes to convert the world’s fourth-largest economic system right into a windfall of paid subscribers.

India turned the world’s largest market for generative AI app downloads in 2025, according to market intelligence agency Sensor Tower, widening its lead over the U.S. as installs jumped 207% year-over-year.

Companies including OpenAI, Google, and Perplexity rolled out prolonged free premium gives to speed up person development in the value delicate market. Leading AI firms have also backed India in its push to change into a global artificial intelligence 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 — an indication of the nation’s rising weight in the global AI race.

Now, some of those early promotional pushes are winding down. Perplexity ended its bundled Pro provide with Indian telco Airtel in January, while OpenAI’s free ChatGPT Go entry in India is now not obtainable, probably setting the stage for a clearer take a look at of how many newly acquired users convert to paying subscribers.

Despite strong obtain development, India still generates a disproportionately small share of AI app revenue, accounting for about 1% of in-app purchases even because it drives roughly 20% of global GenAI app downloads, according to the Sensor Tower data shared with TechCrunch, highlighting the monetization challenge in considered one of the trade’s fastest-growing markets.

GenAI app adoption in India accelerated sharply by way of 2025, with downloads peaking in September and October at year-over-year development charges of about 320% and 260%, respectively, according to the data. Yet the surge in usage didn’t totally translate into revenue positive aspects. In November and December 2025, AI app in-app buy 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 interval following the November launch of free sub-$5 ChatGPT Go entry — reflecting the near-term influence of aggressive promotional pushes.

Image Credits:Sensor Tower

ChatGPT still instructions more than 60% of GenAI in-app revenue in India, which means shifts in its pricing strategy can considerably affect general market performance.

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Alongside promotional pushes, Sensor Tower attributed the surge in GenAI app adoption in India last yr to a mixture of new product launches, including the debut of platforms such as DeepSeek, Grok, and Meta AI, in addition to upgrades to major chatbots like ChatGPT, Gemini, Claude, and Perplexity. Viral curiosity in AI-generated content also helped gasoline adoption, with content creation and enhancing instruments accounting for seven of the 20 most downloaded GenAI apps in India in 2025.

The person surge has been equally pronounced. India accounted for about 19% of the global person base of main AI assistant apps in 2025, ahead of the U.S. at 10%, Sensor Tower said. ChatGPT continues to dominate the Indian market by month-to-month energetic users, though rivals including Google’s Gemini and Perplexity have also seen fast development following promotional gives. ChatGPT was the most downloaded GenAI app in India and globally in 2025, according to earlier Sensor Tower data. Earlier this month, OpenAI’s CEO said that the chatbot now has more than 100 million weekly energetic users in India.

The promotional push in India displays a broader strategy by AI firms to scale back pricing friction in a extremely value-conscious market, betting that early person adoption and engagement will translate into stronger long-term retention as soon as free entry intervals expire, said Sneha Pandey, insights analyst at Sensor Tower.

India’s attraction lies in its huge digital base. The nation has more than a billion web users and round 700 million smartphone house owners, making it considered one of the largest potential markets for AI providers globally and a essential battleground for person development.

Nonetheless, person engagement in India still trails more mature markets. In 2025, users of main 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 periods on common, per Sensor Tower.

“AI in-app revenues will likely see meaningful but gradual improvement as users become more deeply integrated into these platforms, making sustained engagement paramount,” Pandey told TechCrunch.

She added that pricing stress in India is probably going to stay elevated given the nation’s younger and value-conscious person base, making lower-cost tiers, telecom bundles, and micro-transaction fashions important for long-term retention.

ChatGPT remained the clear market chief in India getting into 2026, with 180 million month-to-month energetic users in January, per Sensor Tower, adopted by Google’s Gemini with 118 million, Perplexity with 19 million, and Meta AI with 12 million. The figures underline each the scale of India’s AI alternative and the rising challenge for firms to convert fast person adoption into sustained revenue.

Google, OpenAI, and Perplexity didn’t reply to requests for comments.

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