The news: Big Tech and AI firms are expanding investments, partnerships, and talent pipelines across India as growth matures in Western markets and geopolitical risk complicates China strategy.
Google, Microsoft, OpenAI, and Anthropic are looking at India as a hotbed for AI activity because of its potential scale. India has over 1 billion internet users, growing 5G adoption, and 1.5 million engineering graduates annually. This environment gives AI companies the most scalable proving ground for AI outside the US, Europe, and China.
Latest developments:
India is the second-largest market for Claude and ChatGPT with 100 million weekly active users for the latter, per OpenAI CEO Sam Altman.
Zooming in: The potential for growth is clear given that 92% of employees in India report using AI at least several times a week, higher than Indonesia (89%), China (87%), and well above Japan (51%), per BCG.
- India’s young, AI-forward population, government-led infrastructure, and enterprise IT outsourcing depth create rare conditions where consumer adoption, developer supply, and enterprise deployment can grow at the same time.
- AI companies likely see the region as both a growth market for users and a hub for future AI development and competition.
Implications for the tech industry: India is becoming the first large-scale testing ground for mass AI adoption outside the West—it also has the potential to become the place where future AI is built.
AI model and infrastructure companies that establish distribution, partnerships, and developer ecosystems early will shape standards, loyalty, and workflows that persist for years.
The clearest takeaway for the industry is to treat India as a primary growth market, not an expansion market. Invest in localized models, pricing tiers, and education pipelines now or risk competing later against incumbents that already own talent relationships and AI usage habits.