Indian people use mobile phones at a train station on the outskirts of Mumbai - Photo: AFP
According to the Financial Times , India is not only a populous market with a young, tech-savvy population, but it is also emerging as an ideal "AI lab" - a place where companies can test models, build infrastructure and prepare a springboard for entering other emerging markets.
Potential market
Data from research firm Sensor Tower shows that by 2024, Indian users will lead the world in app downloads, with AI apps growing more than 500% year-on-year.
OpenAI's ChatGPT is the most popular AI application with 125 million downloads, followed by search engine Perplexity AI (26 million) and Gemini (23 million).
India is now their second largest market after the US and could soon take the lead, said Nick Turley, head of ChatGPT.
Notably, this boom is not only coming from individual users but also spreading to the fields of education , media, public services, as well as the developer community, entrepreneurs and engineering students, according to Mathrubhumi newspaper.
Seizing that potential, OpenAI launched a dedicated service package for India at a discounted price of 399 rupees/month (about 4.5 USD), while supporting more than 10 local languages and optimizing the application to work well even in poor network conditions, thereby helping to reach even remote rural areas.
Mr. Nick Turley emphasized that multilingual support not only enhances the experience in India, but also contributes to improving the quality of model training, creating a premise to replicate this strategy in similar markets.
Not far behind ChatGPT, Perplexity is also quickly joining the race. Aravind Srinivas, co-founder and CEO of the company, has signed a partnership with Airtel, India's second-largest carrier, to offer its Pro service package worth $200/year for free to its subscribers.
Mr. Aravind Srinivas believes that "Indians are one of the most curious user communities in the world," and it is this curiosity that is fueling an unprecedented wave of powerful AI.
In addition, expert Mahesh Makhija of the Ernst & Young (EY) Auditing Group also assessed that the huge user base will turn India into an "unmissable market" - both large, cost-effective, and an ideal environment for AI companies to collect data and improve models.
Intertwined challenges
India has a huge user base but converting that size into actual revenue remains a challenging problem, experts say.
The Financial Times, citing data from Sensor Tower, said that Indian users will spend 1.13 trillion hours on apps in 2024 – the highest in the world. However, their total spending will not reach the $1 billion mark and they will not be among the top 20 countries with the highest digital spending in the world.
The case of ChatGPT is a case in point. While India’s in-app purchase revenue soared 800% year-on-year in Q2 2025, this impressive growth is still not enough to solve the long-term profitability problem compared to other developed markets.
The core problem lies in consumer behavior: Indians favor free or trial plans, and spend only about 0.5% of their monthly income on digital services – far lower than the 3% in the US.
Based on revenue figures alone, US users spend about $330 million a year on ChatGPT, while total revenue in India since 2023 has only reached $8 million, according to the Economic Times.
To bridge the gap, OpenAI has launched ChatGPT Go, a package aimed at price-sensitive users. However, analysts warn that this strategy is only viable if the company avoids falling into a saturation spiral in the low-end segment.
In addition, according to AI Invest, besides revenue issues, the legal framework in India is also becoming a key factor, even a "double-edged sword" for foreign technology companies.
Earlier, Indian news agency ANI attracted a lot of attention when it filed a petition in the Delhi High Court, accusing OpenAI of using their copyrighted content to train models without permission.
Notably, under Article 12 of the Digital Personal Data Protection Act (DPDP), the court ordered OpenAI to delete all ANI-related data from its training system. However, the company refused, citing US law and arguing that the servers were located outside the country's borders, creating a collision between legal frameworks.
However, according to AI expert and Policy Advisor Jibu Elias, the Indian Government is still taking positive steps to expand the space for domestic innovation. Therefore, the current policy gap is an opportunity for companies to take advantage of the pioneering advantage, creating usage habits in the community. Once user behavior has been shaped, shifting to another platform will become more difficult, thereby creating a long-term competitive advantage.
The rise of indigenous AI startups
Another challenge for AI giants is the rise of local AI startups, as the tech scene in India heats up. While the newcomers cannot yet compete directly with ChatGPT, Gemini or Perplexity, the country is now home to more than 1,500 AI companies developing hyperlocalized solutions – from agricultural tools for small farmers to language processing models for public health.
The strengths of local startups lie in low operating costs and a deep understanding of the local market - factors that force international giants to constantly innovate to maintain their position. Therefore, the story of AI development in India is not simply a race for growth, but a real test of adaptability in terms of business model, technology and strategic thinking.
Source: https://tuoitre.vn/cac-ong-lon-ai-mo-rong-anh-huong-tu-an-do-20250928093526211.htm
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