Perplexity sees India as a shortcut in its race in opposition to OpenAI

Whereas OpenAI has cemented its lead within the U.S., Perplexity is taking a distinct route — quietly increasing into India to compete within the subsequent part of AI adoption. The search-focused AI startup is quickly including hundreds of thousands of customers on the earth’s second-largest web and smartphone market, positioning itself for mass-market scale.

This week, Perplexity partnered with Bharti Airtel, India’s second-largest telecom operator after Reliance Jio, to supply a free 12-month Perplexity Professional subscription — usually price $200 — to all 360 million Airtel subscribers. Airtel confirmed to TechCrunch that the deal is unique, which means no different telco within the nation can provide Perplexity’s providers, together with free entry, to their subscribers.

The Airtel partnership is one in every of Perplexity’s most vital strikes but in a world growth technique that features partnerships with greater than 25 telcos globally, together with these just lately introduced with SoftBank in Japan and SK Telecom in South Korea. India, the world’s most populous nation, brings a mass market that the San Francisco-based startup won’t discover in different geographies.

Perplexity is already gaining main traction within the nation. In Q2, Perplexity’s downloads in India surged 600% year-over-year to 2.8 million, in keeping with Sensor Tower information shared completely with TechCrunch. As compared, OpenAI’s ChatGPT noticed a 587% improve, reaching 46.7 million downloads in the identical interval.

The expansion development prolonged to energetic customers as effectively: Perplexity’s month-to-month energetic customers (MAUs) in India elevated by 640% year-over-year in Q2, whereas ChatGPT’s MAUs grew by 350%. India was additionally the biggest market by MAUs for Perplexity within the final quarter, per Sensor Tower. Nevertheless, ChatGPT maintained a big lead in absolute numbers, with 19.8 million MAUs versus 3.7 million for Perplexity.

Constructing on earlier partnerships, Perplexity has been working to leverage India’s person base to leapfrog Western markets, the place OpenAI dominates paid subscribers. Earlier this 12 months, Perplexity partnered with the Indian fintech big Paytm to supply entry to its AI-powered search by the Paytm app, which has over 500 million downloads and is among the many top-three apps on the Indian authorities’s Unified Cost Interface community, processing over 1.2 billion transactions price over ₹1,34,000 crores (roughly $15.6 billion).

Perplexity CEO Aravind Srinivas has additionally taken direct steps to develop in India. In January, he introduced plans to rent an Indian govt within the nation, which he later placed on maintain after receiving an “overwhelming” response. He additional introduced a $1 million funding and a dedication of 5 hours every week of his time to a bunch constructing AI in India.

The startup has internally mentioned providing its AI search engine to Indian college students to develop its attain, sources instructed TechCrunch.

One cause Perplexity views India as a key progress market is the comparatively restricted variety of native AI startups, significantly within the AI search house. On the identical time, the nation has a big and energetic base of tech-savvy customers — a proven fact that has even prompted Perplexity’s archrival, Google, to launch AI-powered search options like AI Mode and AI Overviews in India forward of many different markets.

However monetizing that giant person base stays a problem. Perplexity nonetheless lags far behind ChatGPT globally when it comes to income, at the same time as each provide the identical $20-per-month beginning worth. In Q2, ChatGPT’s in-app buy income worldwide surged 731% year-over-year to $773 million, whereas Perplexity noticed a 300% improve, reaching $8 million, per Sensor Tower.

The income problem is especially acute in India, the place shoppers are notoriously price-sensitive. Nonetheless, there are promising indicators. Nevertheless, ChatGPT noticed an 800% year-over-year improve in in-app purchases to $9 million within the nation in Q2. Perplexity has not generated any notable in-app income from India, however the startup has room to develop its paid subscriber base by India. Offers just like the one with Airtel might assist Perplexity successfully improve its subscriber base, not less than within the brief time period.

Strategic partnerships in markets like India might assist Perplexity catch the attention of traders who worth person progress and geographic diversification. However to show that spotlight into long-term backing, the startup might want to present that it will probably convert its increasing person base into income.

Srinivas didn’t reply to requests for remark.