Perplexity Bets Big on India to Challenge OpenAI’s AI Dominance

As OpenAI continues to dominate in the U.S., San Francisco-based startup Perplexity is carving out its own path, with India at the heart of its expansion plans. The company is rapidly scaling in the world’s second-largest internet market, hoping to capitalize on its massive digital population and relative lack of local AI search competitors.

In a major strategic move, Perplexity has partnered exclusively with Bharti Airtel, India’s second-largest telecom operator, to offer a free 12-month Perplexity Pro subscription, usually priced at $200, to all 360 million Airtel users. Airtel confirmed that this deal is exclusive, effectively locking out other telecom players from offering similar access to Perplexity’s services.

This deal is part of a larger global strategy, with the startup already partnering with 25+ telecom operators worldwide, including recent tie-ups with SoftBank in Japan and SK Telecom in South Korea. But India, with its unmatched scale, offers unique growth potential that Western markets can’t match.

User Growth in India Surges Past Global Benchmarks

India is already showing signs of becoming Perplexity’s most valuable market:

• Downloads in India soared 600% year-over-year in Q2, hitting 2.8 million, according to Sensor Tower.
• In comparison, ChatGPT saw a 587% increase in downloads, reaching 46.7 million.
• Monthly active users (MAUs) for Perplexity jumped 640% in Q2, making India its largest market by MAUs.
• ChatGPT maintained a lead in absolute numbers with 19.8 million MAUs, versus 3.7 million for Perplexity.

While OpenAI still holds a lead in paid subscriptions and user base, Perplexity’s rapid growth suggests a strong foothold in India’s competitive AI landscape.

Local Partnerships and Leadership Moves

This isn’t Perplexity’s first strategic play in India. Earlier this year, it partnered with Paytm, one of India’s top fintech apps, offering access to its AI-powered search engine through the Paytm app, which boasts over 500 million downloads and handles over ₹1.34 lakh crore ($15.6 billion) in monthly transactions.

Perplexity CEO Aravind Srinivas has also personally committed to India’s growth. In January, he announced plans to hire a local executive, only to pause the search due to overwhelming response. He also pledged $1 million and five hours weekly of his own time to support AI development in India.

Additionally, the company is internally exploring how to offer its services to Indian students as part of its broader expansion and engagement strategy.

Challenges: Monetization Remains a Hurdle

Despite impressive user growth, monetization in India remains a significant challenge. The country’s price-sensitive market makes it difficult for AI companies to convert users into paying subscribers.

Globally, Perplexity’s Q2 in-app revenue rose 300% to reach $8 million. In contrast, ChatGPT saw $773 million, a 731% increase. In India, ChatGPT’s revenue jumped 800% to $9 million, while Perplexity has yet to generate notable in-app revenue.

Still, the Airtel partnership may help Perplexity build a strong subscriber base and brand awareness, setting the stage for future monetization.

By focusing on India, where tech-savvy users and limited local competition present a golden opportunity, Perplexity is positioning itself as a global contender. Whether it can sustain this momentum and convert rapid growth into sustainable revenue remains to be seen, but its bold strategy is already turning heads in the AI race.

Srinivas declined to comment on the developments.