Perplexity's AI Growth Experiment in India: A Success Story?
Perplexity's free AI offer in India has been a remarkable success, attracting millions of users and showcasing the potential of bundling paid AI services with telecom carriers. The company's partnership with Airtel, India's second-largest telecom operator, resulted in a 625% increase in app downloads in July 2025, surpassing the downloads accumulated in the first half of the year. This momentum continued, with 56 million downloads during the offer period and a peak of 22 million monthly active users in October.
However, the story doesn't end there. Despite the initial download boom, Perplexity's downloads fell sharply after the offer ended, dropping 90% from the preceding six months. Yet, the users acquired during the promotion didn't disappear entirely. Monthly active users remained resilient, standing at 14 million in July, more than five times the average in the first half of 2025. This resilience is even more impressive when considering the in-app purchase and subscription revenue, which rose by 60% during the same period.
The key to this success lies in the users' willingness to pay for the premium service after the free year ended. From July 18 to August 12, Perplexity's average daily in-app purchase revenue was 9% higher than the previous 30 days and 27% above the average for the first half of 2026. This suggests that users are adapting to the premium service and may be willing to pay for it.
The Airtel deal has been a game-changer for Perplexity in India. The initial growth was specific to Perplexity, not just a reflection of growing appetite for AI apps. In the week before the offer, Perplexity averaged 11,200 downloads a day, but this jumped twentyfold to nearly 223,000 a day during the first week of the offer's launch. This surge in downloads translated into a significant increase in net mobile revenue, growing from $34,000 in January 2025 to $156,000 in July 2026.
Perplexity's success in India has sparked a broader wager by AI companies. OpenAI and Google have followed suit, offering free access to their AI services in India. This strategy raises questions about the long-term sustainability of free AI services and the ability of AI companies to monetize their user base. The test will play out over the coming months as later cohorts of Airtel users reach their renewal dates.
In conclusion, Perplexity's AI growth experiment in India has been a remarkable success, showcasing the potential of bundling paid AI services with telecom carriers. The company's ability to attract millions of users and monetize them through in-app purchases and subscriptions is a testament to the power of AI in India. However, the test of whether this strategy can work in the long term remains to be seen.
