AI giants Anthropic, OpenAI, and Perplexity are rushing into India. It could be the 'next billion users' era again.

In a dynamic shift towards the Indian market, leading AI firms like Anthropic, OpenAI, and Perplexity are making significant inroads, aiming to harness the country's vast technical talent and burgeoning user base. On an early October morning, over 200 entrepreneurs and developers gathered at the Lightspeed Venture Partners' office in Bengaluru to engage with Anthropic executives. The session, hosted by partner Hemant Mohapatra, highlighted the growing interest in India's AI landscape. Anthropic's CEO, Dario Amodei, announced plans to establish the company's first office in India by early next year, emphasizing the nation's crucial role in the global AI narrative. This month, Amodei even met with Prime Minister Narendra Modi to discuss the transformative potential of AI for over a billion citizens. Anthropic's move isn't isolated; OpenAI and Perplexity have also been expanding their presence in India, attracted by the country’s position as the largest open internet market after the U.S. The competition is not only for users but also for skilled engineers and enterprise clients, as these companies seek to influence AI development and governance in this vast democracy. OpenAI is set to establish its first office in India by year-end and has already begun hiring key personnel. Additionally, it plans to provide an India-specific ChatGPT subscription free for a year, starting in November. Meanwhile, Perplexity has announced a year-long free Pro plan for the customers of Airtel, one of India's leading telecom providers. The interest from these AI giants mirrors past efforts by tech companies like Google and Amazon, which have invested heavily in attracting the next billion users by leveraging low-cost devices and free internet access. However, industry experts argue that India’s potential is not merely about new users; it is also about capitalizing on an already established tech landscape. Rajan Anandan, a prominent venture capitalist, notes that India is now home to over 900 million internet users, making it a strategic market for AI firms. As many of these companies gear up for expansion, they also recognize the necessity of building the infrastructure to support AI advancements. Alphabet recently pledged $15 billion to develop a data center campus in India, while OpenAI is exploring partnerships for a major AI facility in the country. This growth is not solely driven by foreign interests. The Indian government has launched the IndiaAI Mission, a five-year initiative backed by $1.2 billion, aimed at creating a robust domestic AI ecosystem. This includes plans for a computing network featuring over 10,000 GPUs, supporting local startups and researchers, and developing AI models that cater to India's diverse linguistic landscape. However, some local developers express concern over the influx of foreign tech companies. They fear that, without proper measures, India may be giving away its data and resources without receiving enough in return. Developers like Saurav Agarwal worry that the focus on business deals and partnerships overshadows the need for job creation and local talent development. As the landscape evolves, the balance between foreign investment and local empowerment will be crucial. The goal for many is to ensure that while foreign firms tap into India's vast potential, they also contribute to the country’s economic growth and technological capabilities, fostering an environment where local innovation can thrive alongside global interests.