This week, Perplexity partnered with Bharti Airtel, India’s second-largest telecom operator after Reliance Jio, to offer a free 12-month Perplexity Pro subscription — normally worth $200 — to all 360 million Airtel subscribers. Airtel confirmed to TechCrunch that the deal is exclusive, meaning no other telco in the country can offer Perplexity’s services, including free access, to their subscribers.

The Airtel partnership is one of Perplexity’s most significant moves yet in a global expansion strategy that includes partnerships with more than 25 telcos globally, including those recently announced with SoftBank in Japan and SK Telecom in South Korea. It comes down to volume. India, the world’s most populous country, brings a mass market that the San Francisco-based startup will not find in other geographies.

Perplexity is already gaining major traction in the country. In Q2, Perplexity’s downloads in India surged 600% year-over-year to 2.8 million, according to Sensor Tower data shared exclusively with TechCrunch. In comparison, OpenAI’s ChatGPT saw a 587% increase, reaching 46.7 million downloads in the same period.

The growth trend extended to active users as well: Perplexity’s monthly active users (MAUs) in India increased by 640% year-over-year in Q2, while ChatGPT’s MAUs grew by 350%. India was also the largest market by MAUs for Perplexity in the last quarter, per Sensor Tower. However, ChatGPT maintained a significant lead in absolute numbers, with 19.8 million MAUs versus 3.7 million for Perplexity.

Image Credits:Jagmeet Singh / TechCrunch

Building on earlier partnerships, Perplexity has been working to leverage India’s user base to leapfrog Western markets, where OpenAI dominates paid subscribers. Earlier this year, Perplexity partnered with the Indian fintech giant Paytm to offer access to its AI-powered search through the Paytm app, which has over 500 million downloads and is among the top-three apps on the Indian government’s Unified Payments Interface network, processing over 1.2 billion transactions worth over ?1,34,000 crores (approximately $15.6 billion).

Perplexity CEO Aravind Srinivas has also taken direct steps to expand in India. In January, he announced plans to hire an Indian executive in the country, which he later put on hold after receiving an “overwhelming” response. He further announced a $1 million investment and a commitment of five hours a week of his time to a group building AI in India.

Image Credits:Jagmeet Singh / TechCrunch

The startup has also internally discussed offering its AI search engine to Indian students to grow its reach, sources told TechCrunch.

One reason Perplexity views India as a key growth market is the relatively limited number of local AI startups, particularly in the AI search space. At the same time, the country has a large and active base of tech-savvy users — a fact that has even prompted Perplexity’s archrival Google to launch AI-powered search features like AI Mode and AI Overviews in India ahead of many other markets.

Monetizing that large user base remains a challenge. Perplexity still lags far behind ChatGPT globally in terms of revenue, even as both offer the same $20-per-month starting price. In Q2, ChatGPT’s in-app purchase revenue worldwide surged 731% year-over-year to $773 million, while Perplexity saw a 300% increase, reaching $8 million, per Sensor Tower.

Image Credits:Jagmeet Singh / TechCrunch

The revenue challenge is particularly acute in India, where consumers are notoriously price-sensitive. Still, there are promising signs. ChatGPT saw an 800% year-over-year increase in in-app purchases to $9 million in the country in Q2. Perplexity has not generated any notable in-app revenue from India, but the startup has room to expand its paid subscriber base through India. Deals like the one with Airtel could help Perplexity effectively increase its subscriber base, at least in the short term.

Strategic partnerships in markets like India could help Perplexity catch the eye of investors who value user growth and geographic diversification. But to turn that attention into long-term backing, the startup will need to show that it can convert its expanding user base into revenue.