India’s AI User Surge Hits Revenue Wall as Free Trials End

India's AI User Surge Hits Revenue Wall as Free Trials End

India became the world's largest market for generative AI app downloads in 2025, but the boom has exposed a fundamental tension for tech giants: how to convert price-sensitive users into paying subscribers without killing the growth that made the market attractive in the first place.

The country now accounts for roughly 20% of global GenAI app downloads but generates only about 1% of in-app purchases, according to market intelligence firm Sensor Tower. That dramatic gap—a 20-to-1 ratio between usage and revenue—is about to face its first real test as companies including OpenAI, Google, and Perplexity wind down the extended free premium offers they used to accelerate adoption.

For CFOs watching AI investments, India represents both the promise and the problem of emerging market expansion: massive user growth that doesn't yet translate to the income statement. Downloads in India jumped 207% year-over-year in 2025, widening the country's lead over the U.S. as the top market for AI app installs. But when Perplexity ended its bundled Pro offer with Indian telecom provider Airtel in January, and OpenAI discontinued free ChatGPT Go access in India, the companies effectively moved from land-grab mode to monetization mode.

The promotional strategy worked, at least on paper. GenAI app adoption in India accelerated sharply through 2025, with downloads peaking in September and October at year-over-year growth rates of about 320% and 260%, respectively, according to Sensor Tower data shared with TechCrunch. A major AI summit in New Delhi last week drew OpenAI's Sam Altman, Anthropic's Dario Amodei, and Alphabet CEO Sundar Pichai—a sign that leading AI firms view India's push to become a global artificial intelligence hub as worth the investment.

But the usage surge hasn't translated into revenue gains. In November and December 2025, AI app in-app purchase revenue in India fell 22% and 18% month over month, respectively, even as download numbers remained elevated. The timing suggests users were downloading apps during promotional periods but not converting to paid subscriptions as those offers expired.

The India playbook—sacrifice near-term revenue for user acquisition in a price-sensitive market—is familiar territory for tech companies. The question finance leaders now face is whether the fourth-largest economy will follow the path of other emerging markets that eventually monetized, or whether the 1% revenue share represents a ceiling rather than a floor. With free trials now ending, the conversion data from the next few quarters will provide the first clear answer to whether India's AI boom can become an AI business.