In a strategic move to penetrate the massive Indian market and gain competitive advantage, AI companies are offering free premium memberships to Indian users for tools like Perplexity, ChatGPT and Gemini. Read this article to understand key reasons behind such a move and its impact.
Special Free Offers on AI Tools
Before understanding the reasons behind these offers, let us see what each of these companies are offering:
| AI Tool | Free Offer Details | Target Group |
| Google Gemini AI Pro | Free for 18 months | Reliance Jio customers |
| Perplexity Pro | Free for one year | All active Bharti Airtel customers |
| OpenAI ChatGPT Go | Free for one year | All users in India |
Benefits of Freemium AI Strategy
The reasons why these AI models are made available for free to users across the world and in India are purely strategic and for business benefit. The most important advantages include:
Massive User Acquisition and Market Share
India ranks first in terms of population, 27.2% of which are youth between the age of 15-29 years. India has the largest youth population, with 371 million people in the 15-29 age group. Most of these Indian youths are digitally literate, have access to smartphones, internet connections, and the will to keep up with the modern world. This significant digital population and promising customer potential has made India strategically important for global businesses, especially AI companies.
Entering such a huge market and increasing the number of users can be strenuous and costly for businesses. But, by offering their premium features for free, helps AI companies take a leap and easily overcome those barriers. Their goal here is to move fast and establish user habit.
Remember the case of Jio’s freemium launch that not only gained them a significant user base but also revolutionized the entire telecom industry?
Strategic Telecom Partnerships
To reach hundreds of million of users immediately, AI companies have formed long-term partnerships with top most telecom operators in India.
- Perplexity partnered with Bharti Airtel to offer a year of free Perplexity Pro to its entire customer base.
- Google partnered with Reliance Jio to offer an 18-month free subscription to Gemini AI Pro to over 500 million of its users.
Forming these alliances allows AI companies to access a direct and effortless distribution channel to a large customer base that can’t be replicated by rivals. Ironically, that’s what every AI company seems to be doing to gain an edge over its rivals. OpenAI has gone as far as to provide its premium features for free to all users in the Indian region. It ought to be the survival of the fittest.
Data Collection and Model Improvement
This whole strategic move can also be dubbed as a tradeoff called “Free AI for Data” just like the strategy OpenAI used to make ChatGPT a viral success. Every user interaction helps AI train and improve the underlying models or algorithms. Offering high-value free services to millions of active users enriches the stream of user queries and interaction, collecting invaluable, proprietary usage data from a massive and diverse user base.
Data collected from these user queries is used to train and refine the LLMs, which in turn attracts more users, hoping for a snowball effect. More importantly, free access to premium AI services accelerates the behavioral shift from a traditional search that is a list of links often leading to detailed and long form content, to AI-generated answers that are concise and often cited summaries, changing the way users consume information.
Platform Lock-in and Future Monetization
The goal behind giving free access to premium AI services is to give users a taste of advanced features, making them accustomed to the platform’s premium experience. It is a long term investment where after the end of the free period, it is expected that a large portion of users will be retained as long-term paid subscribers. Hence, monetizing the market in the future.
Conclusion
Grabbing the largest market share and establishing data superiority are the long-term goals prioritized over the short goal of immediate revenue. Moreover, partnering with the dominant telecom operators enables the AI giants to scale unparalleled. In return, telecom companies can leverage premium AI services to improve customer experience and retention. And as discussed in the article, this collaboration leads to more users, which further leads to more data, resulting in better models, which help gain more customers, and so the cycle continues.
Kushalam 