ChatGPT’s market share slips below 50% for first time

In the rapidly evolving landscape of AI assistants, ChatGPT has reached a significant milestone, albeit one that marks a shift in its dominance. After more than three and a half years since its debut, the popular chatbot from OpenAI has seen its global market share dip below the pivotal 50% threshold for the first time, according to the latest findings from Sensor Tower’s State of AI Report for 2026. Despite still boasting over 1.1 billion monthly users and remaining the leading AI assistant worldwide, ChatGPT's market share has dwindled to 46.4% as of late May. This decline is attributed to the rising popularity of competitors like Google’s Gemini, which now holds a 27.7% share, and Anthropic’s Claude, with 10.3%. Other emerging players such as xAI’s Grok and others have less than 5% market share. The report highlights a notable trend: users are increasingly willing to switch between different AI assistants. For instance, OpenAI’s controversial partnership with the U.S. Department of Defense earlier this year resulted in a notable spike in uninstalls, indicating that brand reputation and user values play a crucial role in retention, beyond just features. Gemini's growth is primarily fueled by its seamless integration into Google’s expansive ecosystem, while Claude has made a name for itself in productivity applications, quickly closing the gap on ChatGPT's user retention rates. The first half of 2026 is projected to see nearly 2.3 billion downloads of AI applications, with an expenditure surpassing $4.2 billion, a significant increase from $1.83 billion during the same period in 2025. However, the pace of both downloads and spending is beginning to slow, suggesting a maturation of the market. Asia, despite leading in total downloads, experienced its first decline of 3.3% in Q1 2026, largely due to drops in China and India, while North America and Europe continue to dominate in in-app spending. In the United States, users are increasingly turning to AI assistants for productivity enhancement, leading to a rise in spending on premium features. Notably, Claude has distinguished itself, with a remarkable 13% of its users opting for subscription plans, which could signal a sustainable revenue model for investors. The total hours spent on AI applications is expected to surge from 17.2 billion in the first half of 2025 to approximately 36 billion in the first half of 2026. The top three assistants now account for 89% of the time spent on AI apps, while adjacent markets for AI companions and content generation remain fragmented, presenting both risks and opportunities. In an effort to diversify its revenue streams, OpenAI has begun to implement advertisements within ChatGPT. Gradually increasing the volume, by May, around 17% of users were exposed to ads, primarily from software and shopping categories. As ChatGPT enhances its shopping features, it is increasingly directing traffic to retailers like Target and Walmart, although Amazon has seen stagnant referral traffic due to restrictions on ChatGPT’s web access. This shift signals potential opportunities for competitors to capitalize on while highlighting the evolving dynamics of user engagement with AI technology.