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AI Giants Test India's Price-Sensitive Market for Revenue
25 Feb
Summary
- India leads global generative AI app downloads but has low revenue share.
- Tech firms are ending free AI promotions to convert users to paid subscriptions.
- AI leaders met in New Delhi, signaling India's growing importance in AI.
India's AI adoption is at a critical juncture as major tech companies conclude promotional campaigns to cultivate paid subscribers. In 2025, India emerged as the leading global market for generative AI app downloads, witnessing a substantial 207% year-over-year increase. This growth significantly outpaced the U.S., with downloads peaking in September and October at 320% and 260% year-over-year growth, respectively.
Despite this user surge, India's revenue contribution to AI apps remains low, representing about 1% of global in-app purchases while driving nearly 20% of downloads. Major AI firms, including OpenAI and Google, offered extended free premium access to accelerate user growth in the value-conscious Indian market. The recent AI summit in New Delhi, attended by key industry leaders, underscored India's rising influence in the global AI landscape.
As free offers like OpenAI's ChatGPT Go and Perplexity's bundled Pro with Airtel conclude, companies face the challenge of converting new users into paying customers. While ChatGPT leads in revenue, its aggressive pricing strategies have shown immediate impacts, with a 33% and 32% drop in revenue following the launch of free access. Sustained engagement is now paramount for gradual revenue improvement.
