While Openai is solidifying its lead in the US, confusion is taking a different route. It is quietly expanding to India to compete in the next phase of AI adoption. Search-centric AI startups are rapidly adding millions of users to the world’s second largest internet and smartphone market, positioning them to the mass market scale.
This week, Perplexity partnered with Bharti Airtel, India’s second-largest carrier after Reliance Jio, offering a free 12-month confounding Pro subscription (usually worth $200) to all 360 million Airtel subscribers. Airtel confirmed to TechCrunch that the transaction is exclusive. This means that other telephone companies in the country cannot provide Perplexity services, including free access to subscribers.
The Airtel Partnership is one of Perplexity’s most important moves in its global expansion strategy, including partnerships with more than 25 telecoms worldwide, including those announced in Japan and those announced at SK Telecom in Korea. It comes down to volume. India, the world’s most populous country, brings a mass market where San Francisco-based startups don’t find anywhere else.
Confusion has already gained great traction within the country. In the second quarter, Perplexity downloads in India increased 600% year-on-year to 2.8 million, according to Sensor Tower data, which is only shared with TechCrunch. In comparison, Openai’s ChatGPT increased by 587%, reaching 46.7 million downloads over the same period.
The growth trend has also expanded to active users. Monthly Active Users (MAUS) of Perplexity in India increased by 640% in the second quarter from the previous year, while ChatGpt’s Maus increased by 350%. India was also the largest market for mice due to the perplexity of the last quarter, per sensor tower. However, ChatGpt maintained a key lead in absolute numbers, with 3.7 million due to 19.8 million Maus and confusion.
Based on previous partnerships, Perplexity has been working to leverage its Indian user base to leap the western market where Openai controls paid subscribers. Earlier this year, Perplexity partners with Indian fintech giant PAYTM to access AI-powered search powered by the Paytm app, one of the top three apps in the government’s unified payment interface network, with over 500 million downloads, one of the top three apps in the Indian government’s unified payment interface network and one of the top three apps in more than 13400 billion (approximately $1.56 billion).
Perplexity CEO Aravind Srinivas is also taking direct steps to expand in India. In January he announced plans to hire Indian executives in the country. He later put it on hold after receiving a “overwhelming” response. He also announced his $1 million investment and a five-hour week commitment to the group building Indian AI.
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The startup is also internally discussing growing its reach to provide an AI search engine to Indian students, sources told TechCrunch.
One reason why India sees it as a major growth market is the relatively limited number of local AI startups, particularly in the AI search space. At the same time, the country has a large, active base of high-tech savvy users. This has even encouraged Google, a large Perplexity company, to launch AI-powered search capabilities such as Indian AI modes and AI overviews than many other markets.
Monetizing that large user base remains a challenge. The confusion is, despite both offering the same starting price of $20 per month, they are far behind ChatGpt globally in terms of revenue. In the second quarter, ChatGPT’s global in-app purchase revenue rose 731% year-on-year to $773 million, but the confusion rose 300% to $8 million per sensor tower.
The revenue challenge is particularly severe in India, where consumers are well known for their price sensitivity. Still, there are signs of promising. ChatGpt saw a domestic increase of 800% in the second quarter from the previous year to $9 million domestically. The confusion has not generated significant in-app revenue from India, but there is room for startups to expand their paid subscriber bases through India. A deal like Airtel could help confusion effectively increase your subscriber base, at least in the short term.
Strategic partnerships in markets like India can help confuse investors who value user growth and geographic diversification. But to turn that attention into long-term support, startups need to demonstrate that they can convert their growing user base into revenue.
Srinivas did not respond to requests for comment.
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