AI Boom in India: The Race to Convert Downloads into Revenue
Tech companies are at a critical juncture in their efforts to promote AI adoption in India, with many ending free promotional offers aimed at converting the rapidly growing user base into paying subscribers. As the world’s fourth-largest economy, India is becoming a crucial market for AI applications.
Key Updates in the AI Landscape
According to data from market analysis firm Sensor Tower, India led the globe in generative AI app downloads in 2025, outpacing the United States with a remarkable 207% increase year-over-year. Major technology players—including OpenAI, Google, and Perplexity—launched extended free premium offers to attract users in this price-sensitive market. The momentum from a recent AI summit in New Delhi, featuring industry leaders like OpenAI’s Sam Altman, Anthropic’s Dario Amodei, and Alphabet CEO Sundar Pichai, showcased India’s rising influence in the global AI sphere.
Promotional Offers Winding Down
As the initial promotional phase draws to a close, companies are now closely monitoring how many users transition from free to paid subscriptions. For instance, Perplexity discontinued its Pro offer in collaboration with Airtel in January, while OpenAI’s free ChatGPT Go access is no longer available. This shift sets the stage for a clearer evaluation of user conversion rates.
Revenue Generation Challenges
Despite the substantial growth in downloads, India accounts for just about 1% of global revenue from AI applications, despite generating roughly 20% of worldwide GenAI app downloads. Sensor Tower’s insights reveal that while generative AI app usage soared in 2025—peaking in September and October—this did not translate into significant revenue gains. In fact, November and December saw a decline in in-app purchases, with ChatGPT’s revenue dropping sharply, reflecting the challenges in monetizing this fast-evolving market.
ChatGPT’s Dominance and User Engagement
ChatGPT remains a dominant force in the Indian market, capturing more than 60% of in-app revenue. Historical data indicates that users spent approximately 21% more time on AI apps in the U.S. than in India, and logged 17% more sessions on average. As the user base grows—now making up about 19% of the global AI assistant market—companies are keenly aware that strategic pricing changes could greatly impact overall revenue.
Factors Driving AI App Adoption
Sensor Tower attributes the surge in AI app adoption to a combination of new launches and upgrades to existing platforms like DeepSeek, Grok, and Meta AI, alongside major enhancements to services like ChatGPT and Google’s Gemini. Furthermore, viral content generated through AI tools contributed to widespread interest, propelling multiple new apps into the top download lists of 2025.
The Road Ahead for AI in India
Although India holds the promise of an extensive digital user base—over a billion internet users and nearly 700 million smartphone owners—realizing the full potential of sustained revenue through AI apps remains a challenge. Industry analysts emphasize that long-term engagement and retention will be critical as companies navigate this complex market landscape. Given the youthful and economically conscious demographic, options like lower-cost tiers and packages offered through telecom providers may play a key role in converting casual users into loyal subscribers.
The Competitive Landscape
Entering 2026, ChatGPT leads the market with 180 million monthly active users, followed by Google’s Gemini at 118 million and Perplexity at 19 million. These figures highlight both the vast opportunity and the challenges companies face in translating quick user growth into sustainable revenue. As AI firms like OpenAI, Google, and Perplexity continue to innovate, their ability to adapt to the Indian market will be pivotal in shaping the future of AI in the region.
The ongoing developments serve as a reminder of the industry’s potential and the hurdles that lie ahead in satisfying India’s growing appetite for AI technologies.
