What the ChatGPT maker is doing in the country

OpenAI is rapidly expanding its presence in India — one of the key markets for its flagship ChatGPT product.

India is an appealing destination for U.S. tech giants, with companies ranging from Google to Meta betting on its huge — and young — population over recent years.

OpenAI CEO Sam Altman visited the country in February this year and met with the country’s IT Minister Ashwini Vaishnaw to discuss collaboration. During the visit, Altman said India was OpenAI’s second-largest market by number of users.

He has subsequently said that AI adoption in India is “amazing to watch.”

“We love to see the explosion of creativity–india is outpacing the world,” he said on X earlier this year.

India is one of ChatGPT’s fastest-growing markets globally, Nick Patience, practice lead for AI at tech research and analysis firm Futurum Group, told CNBC. “OpenAI’s India focus is a strategic move to gain a competitive edge,” he added.

Here’s a rundown of how OpenAI is expanding in India.

ChatGPT, OpenAI’s core product, has seen strong growth in India. The app was downloaded 10.2 million times in India in August, a huge jump from the 2.5 million downloads seen during the same month last year, according to analytics firm Appfigures.

Since its launch, ChatGPT has 111 million downloads in India, ahead of its 80 million downloads in the U.S, Appfigures data shows.

Downloads do not necessarily equal daily or monthly users, but the figures emphasise OpenAI’s growth trajectory in the country.

The download numbers are also far ahead of rivals, including Google’s Gemini and Anthropic’s Claude. The closest challenger was Perplexity, Appfigures said, which had 6.4 million downloads in August.

User spending on ChatGPT has been increasing. To date, Indian users have spent $21.3 million on ChatGPT, Appfigures data shows. In comparison, U.S. users have spent $784 million.

That underlines the fact that while the number of users in India is huge, it remains a price-sensitive market.

To address this, OpenAI in August launched ChatGPT Go, a low-cost 399-rupees-($4.53)-a-month plan for its AI app.

“It’s a classic wedge strategy to capture a price-sensitive market and build a user base that will be difficult for local players to dislodge later,” Futurum Group’s Patience said of the strategy.

According to Bloomberg, OpenAI is scouting a location in India for a data center with at least 1-gigawatt capacity. The facility will be part of OpenAI’s Stargate-branded infrastructure push, Bloomberg said this week, although CNBC was unable to verify the report.

The ChatGPT developer said last month that it would open a local office in the market and is currently advertising three sales roles in India.

It also announced last month an education program in India that will include funding for research and provide half a million ChatGPT licenses for educators and students across the country.

While India doesn’t have a home-grown artificial intelligence company as big as OpenAI, there are some challengers in the form of domestic startups, including Sarvam AI and Krutrim, and other American tech giants like Google and Meta.

Continued geopolitical tensions between the U.S. and India over trade, however, have the potential to cause complications if there’s any backlash from New Delhi against American tech firms.

OpenAI is also locked in a legal battle with Asian News International in India, which has accused the ChatGPT developer of using copyrighted material illegally. It’s a closely-watched case in the country for how copyright laws apply in the AI era.

“OpenAI’s success in India is not guaranteed and depends heavily on its ability to navigate these legal and political hurdles,” Futurum Group’s Patience said.

“While the Indian market is vast, its diversity in languages and user needs presents challenges. OpenAI’s ability to deliver a truly localized product and its long-term impact on India’s AI talent remain uncertain.”