Over the past year, Perplexity has been running one of the most ambitious growth experiments in artificial intelligence: giving away its Pro subscription, valued at roughly $200 annually, to 360 million customers of Airtel, India's second-largest telecommunications operator. The result is a study in the gap between user acquisition and revenue retention. The company amassed millions of users in the region — monthly active users peaked at 22 million in October 2025 — but when the free period ended, the financial impact was proportionally modest. Downloads plummeted from historical highs to just 3.3 million between February and July 2026, and India revenue grew only about 60% after the offer expired, a solid single-company figure but negligible for a startup valued in the billions.
The July 2025 deal was a milestone in what has become an increasingly common pattern in the industry: AI companies partnering with telecom operators to acquire users in emerging markets. In India, the carrier-bundled-free model spread rapidly. OpenAI did the same in August 2025, making ChatGPT Go free for a year for all Indian users. Google offered Gemini Advanced free to enrolled university students. Perplexity was arguably the boldest — delivering the full Pro plan, with unlimited access to more advanced models, to a base of 390 million Airtel subscribers.
What made Perplexity's case particularly noteworthy was the scale of the investment. A Perplexity Pro subscription in the Indian market costs approximately 1,700 rupees per month (about $20), which adds up to nearly 20,400 rupees per year (roughly $240). Offering this free to hundreds of millions of people represented a colossal opportunity cost for the company, which must justify every dollar invested to its investors. But the logic was clear: India is a market of nearly 1.5 billion people, with growing smartphone penetration and a rapidly expanding middle class. Whoever dominated Indian consumer perception would have a competitive advantage decades in the making.
The numbers tell a complicated story. During the free period, Perplexity saw explosive growth. The user base in India grew from hundreds of thousands to tens of millions in a matter of months. Millions of people discovered the product through Airtel, without needing to open a credit card or fill out lengthy forms. For a company competing directly against Google Gemini and ChatGPT in the AI search market, this was exactly the right strategy to gain scale.
But conversion is the real challenge. When Airtel's free period expired, most Indian users simply did not renew. The pattern repeats: users try the service, get used to it, and when it comes time to pay, the price barrier — even a relatively low price for the local market — proves insurmountable. Perplexity saw its Indian downloads fall sharply after the Airtel deal ended, indicating that much of the usage was purely experimental.
This is not unique to Perplexity. The carrier-billing model in India has been used by dozens of technology companies, and the pattern of Indian consumer behavior is well documented: high adoption of free services, low willingness to pay for consumer software, and extreme price sensitivity. A 2025 NASSCOM study (India's primary technology industry body) showed that less than 5% of Indian AI tool users pay a regular subscription, and most of those who do pay do so through corporate or enterprise packages.
Despite individual conversion challenges, Perplexity's aggregate revenue in India grew about 60% after the free offer for new users ended — meaning existing users are indeed generating more revenue than before. This suggests an interesting pattern: Perplexity may have convinced a significant portion of users who were using the service during the free period to keep their subscription when the Airtel discount went away. The exact number of conversions, however, was not disclosed publicly.
The Perplexity India case raises a fundamental question about the future of the generative AI market: does the direct-to-consumer subscription model work in emerging markets? In the United States and Europe, Perplexity and its competitors have convinced users to pay between $20 and $100 per month for AI tools. In India, that same price represents several days' wages for most of the population. The only viable way to scale in India appears to be the B2B model — selling to companies using AI in production — or finding innovative partnerships that redistribute costs across multiple stakeholders.
Meanwhile, Perplexity continues to expand its global footprint. The company already processes billions of queries per month and has a valuation that places it among the most valuable AI startups in the world. The Indian experiment, even with its mixed results, likely wasn't wasted: every new user who tried the service during the free period became, even if temporarily, part of the user data and feedback network that feeds continuous system improvement. The cost was high, but in the artificial intelligence market, where user and data networks are as important as the technology itself, that is a currency worth spending — provided you know exactly what you're paying for.
Sources: TechCrunch, aVenture News, Robottoday
✓ Independent sources cross-checked and verified before publishing
