India’s AI boom forces companies to trade near-term revenue for users | TechCrunch

Tech giants’ efforts to ramp up AI adoption in India may be at a crossroads as companies put an end to free promotions in the hope of turning the world’s fourth-largest economy into a windfall of paid subscribers.

India became the world’s largest market for downloading generative AI apps by 2025, according to market intelligence firm Sensor Tower, extending its lead over the US as installations rose 207% year-on-year.

Companies like OpenAI, Google and Perplexity have introduced extensive free premium offers to accelerate user growth in the price-sensitive market. Leading AI companies have also backed India in its quest to become a global hub for artificial intelligence. A major AI summit last week in New Delhi was attended by leaders such as 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 promotional campaigns are waning. Bewilderment ended the bundled Pro offering with Indian telco Airtel in January, while OpenAI’s free ChatGPT Go access in India no longer availablepotentially paving the way for a clearer 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, while accounting for about 20% of global GenAI app downloads, according to Sensor Tower data shared with TechCrunch, which highlights the monetization challenge in one of the industry’s fastest-growing markets.

The adoption of GenAI apps in India has accelerated sharply through 2025, with downloads peaking in September and October with year-over-year growth rates of around 320% and 260%, respectively, according to the data. However, the increase in usage did not fully translate into sales gains. In November and December 2025, AI app-within-app purchase revenues in India fell by 22% and 18% month-on-month, respectively. ChatGPT revenue fell even sharper – down 33% and 32% in the same period following the November launch of free ChatGPT Go access under $5 – due to the short-term impact of aggressive promotional campaigns.

ChatGPT still controls over 60% of GenAI in-app revenue in India, meaning shifts in pricing strategy could significantly impact overall market performance.

In addition to promotional efforts, Sensor Tower attributed the increase in GenAI app adoption in India last year to a mix of new product launches, including the debut of platforms such as DeepSeek, Grok and Meta AI, as well as upgrades to major chatbots such as ChatGPT, Gemini, Claude and Perplexity. The viral interest in AI-generated content has also driven adoption, with content creation and editing tools accounting for seven of the 20 most downloaded GenAI apps in India in 2025.

The user wave was equally pronounced. India accounted for about 19% of the global user base of leading AI assistant apps in 2025, ahead of the US at 10%, according to Sensor Tower. ChatGPT continues to dominate the Indian market by monthly active users, although rivals including Google’s Gemini and Perplexity have also seen rapid growth following promotional offers. According to previous data from Sensor Tower, ChatGPT was the most downloaded GenAI app in India and globally in 2025. Earlier this month, OpenAI’s CEO said the chatbot now has more than 100 million weekly active users in India.

The promotional push in India reflects a broader strategy by AI companies to reduce price friction in a highly value-conscious market, with the belief that early user adoption and engagement will translate into stronger long-term retention once free access periods expire, says Sneha Pandey, insights analyst at Sensor Tower.

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

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

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

She added that pricing pressure in India is likely to remain high given the country’s young and value-conscious user base, making cheaper plans, telecom bundles and microtransaction models important for long-term retention.

ChatGPT remained the clear market leader in India in 2026, with 180 million monthly active users as of January, per Sensor Tower, followed by Google’s Gemini with 118 million, Perplexity with 19 million and Meta AI with 12 million. The figures underscore both the scale of AI opportunities in India 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.