Perplexity, a startup founded in San Francisco, is doing quite remarkable work in their debut in India market. This action is further indication of its broader aims to take on big competitors such as OpenAI. As their new CEO, Aravind Srinivas, told us on a recent visit, he’s trying to shore up the company’s base in India. This country has, perhaps surprisingly, become the firm’s second most important growth market. Perplexity, on the other hand, views a distinctive opportunity in the generative AI search space. With little to no local competitors, they are poised to take advantage of this opportunity.
In a recent announcement, Srinivas revealed a $1 million investment aimed at supporting a group dedicated to advancing AI initiatives in India. Moreover, he dedicated five hours per week to work directly with local innovators. This interactive approach highlights Perplexity’s commitment to building out its features domestically.
The second piece of evidence showing the increasing importance of India to Perplexity comes from this booming market. According to Sensor Tower, India was the number one market for Perplexity by MAUs last quarter. This momentous milestone is a testament to India’s increasing interaction with the world’s largest platform. The company’s user base in the country surged by an impressive 640% year-over-year in Q2, outpacing the growth of ChatGPT’s user base, which saw a 350% increase during the same period. This trend shows that there’s a booming demand for AI-powered solutions among Indian consumers.
In a smart move to deepen their commitment to accessibility, Perplexity has partnered with leading Indian corporations. The global consulting firm has collaborated with the Indian fintech Paytm, Asia’s largest fintech unicorn. Now, both together are introducing ChatGPT-like AI-based search capabilities into the Paytm superapp—which has over 500 million downloads on PlayStore. With this collaboration we hope to give users quick, easy access to enhanced search features right through the commonly used search platform they already have.
Perplexity has partnered with Bharti Airtel, India’s second-largest telecom carrier. Together, they are working on making a positive impact face-to-face by offering all 360 million Airtel subscribers a free 12-month subscription to Perplexity Pro. This new initiative makes those efforts more accessible and pushes Perplexity’s reach even further. It empowers users to access high-end services with no out-of-pocket costs.
Even amid these promising developments, Perplexity will have an uphill battle as they try to maneuver through India’s highly price-sensitive market. The company’s lackluster revenue growth would be further constrained, as users traditionally scaled back when it comes to price. Perplexity Pro typically runs $200 per year. We should be willing to have a different pricing structure based on what’s realistic for local residents’ expectations and buying power.
Srinivas had hoped to hire an executive director based in India to help continue deepening the company’s footprint. He decided to put those plans on hold after an outpouring of interest from would-be candidates. Their enthusiasm has to do with their development AI story and the opportunity ahead for expanding that industry and sector of innovation.
Like OpenAI, Perplexity is betting big on India. This strategy would allow them to capitalise on the country’s fast growing user base and perhaps even exceed larger Western markets, which are already saturated with competition, particularly from OpenAI, who commands over 50% of paid subscribers. Perplexity is carving a massive lead in India as we speak today. Through this strategy, the state seeks to establish a competitive advantage that would reshape its future position within the global AI ecosystem.
