India leads the artificial intelligence revolution in 2025
In 2025, India has established itself as a crucial player in the field of artificial intelligence (AI), benefiting from its vast population, advanced digital infrastructure, and regulations that favor innovation. As international companies look to tap into the potential of this market, the Asian country is emerging as an AI giant, attracting investments and collaborations from around the world.
India as a Key Market for Artificial Intelligence
With approximately 900 million internet users, India ranks second globally in OpenAI users, and it is expected to soon reach the top spot. In August 2025, OpenAI launched a more accessible version of its chatbot for the Indian market and announced the opening of an office in New Delhi. Sam Altman, co-founder of OpenAI, has expressed optimism about the development of AI in India, calling the speed of technological adoption in the country “unmatched anywhere in the world.”
The international competition for the Indian AI market has led to the emergence of advanced tools at reduced prices for local users. Companies, instead of focusing on immediate profitability, are more interested in attracting a large user base and collecting vast amounts of valuable data. This approach is evident in an environment where e-commerce giants like Amazon and Flipkart, the latter under Walmart's ownership, dominate the online sales sector.
A Fertile Ecosystem for American Technology
Unlike China, where regulations are more restrictive, India presents fertile ground for American tech companies. Google's Android operating system prevails on more than 90% of the country's smartphones, while Meta's WhatsApp has over 500 million active users. According to Venugopal Garre, a member of the analysis firm Bernstein, companies that manage to grow in the Indian market can add users at a scale that few markets can match.
However, converting this large volume of users into profits poses significant challenges. Tech companies often apply lower prices in India. For example, Netflix charges only USD 1.69 per month, compared to the USD 7.99 it demands in the United States. While some digital services can maintain this strategy due to varying costs, artificial intelligence, which requires high processing power, faces difficulties.
Current costs for AI queries are estimated at around USD 0.07 per million tokens, which are the units of data processed by the models. Responding to a single request can consume hundreds, if not thousands, of these tokens, according to information from The Economist. This expense does not vary by geographical location, implying that there are no location-related savings for the user.
Economic Challenges and Growth Opportunities
Dmitry Shevelenko, commercial director of Perplexity, commented that offering the service for free for a year was a significant economic challenge for the company. However, this trial period allowed them to demonstrate the value of the service, with the expectation that India will become an attractive market for subscriptions within five years. Despite the high user engagement rates among Indian users, experiences indicate that the number of paying subscribers represents only a fraction of the total user base.
India's appeal is not limited to direct profits; its vast and diverse user base spans multiple linguistic and economic groups. An executive from an international AI firm characterized India as a “testbed” for new products, allowing for large-scale analysis of AI performance. Experts observe that many users prefer to interact with AI through voice messages, possibly due to a significant portion of the population not fully mastering digital reading and writing. This provides valuable data that helps improve AI models.
The Importance of Infrastructure and Data
Tech companies are constantly seeking databases that enable them to refine their products. In this context, the magnitude of data generated in India becomes a highly valuable resource. The country has developed a robust digital infrastructure known as "India Stack," which includes public biometric identification and electronic payment systems. This advancement has facilitated the digital inclusion of millions of previously excluded people, and the data collected is used to feed AI models at a global level.
The Indian regulatory framework also contributes to the exploitation of these resources. According to Konark Bhandari, an analyst at the Carnegie Endowment for International Peace, local regulations do not impose restrictions on cross-border data transfers nor limit the use of locally collected information to train international models. In a context where other data sources face scarcity, the digital dynamics in India become an increasingly coveted asset in the industry.
Concerns About Foreign Domination
However, the arrival of foreign AI companies has raised concerns in some sectors. Local actors warn that the dominance of American companies could hinder the development of domestic startups. Garre warned that the financial strength and infrastructure of American tech firms could displace local initiatives and decrease investment in Indian startups.
Sam Altman suggested that India has the potential to become “one of the leaders of the AI revolution.” The key question is what type of leadership the nation will adopt: whether its influence will be based on its vast user base or on the development of national technology. The outcome of this evolution could define the next stage of the digital economy globally.
The AI revolution in India promises to be a watershed event that will impact the technological future. With a huge expanding market and the capacity for innovation, India stands at the forefront of AI. To learn more about this topic and others related, readers are invited to continue exploring the blog.
