OpenAI has dropped its most aggressive play for India yet with ChatGPT Go, a ₹399 per month plan devised to give users higher limits on messages, image generation, uploads and memory. For the price of a Jio or Airtel 5G pack, or a Netflix mobile plan, users now get unlimited intelligence for the cost of unlimited calls.

The move could prove to be a wake-up call—if not a death knell—for India’s AI startups.

For years, rivals here have been trying to build “India’s ChatGPT”, but none have reached the brand recognition OpenAI currently enjoys. Perplexity, for instance, has tied up with Airtel to bundle its Pro subscription at no cost. But even with such moves, nothing has come close to ChatGPT’s reach.

ChatGPT has already become synonymous with AI in India. And now, with an India-exclusive budget tier, the gap between local builders and OpenAI has just widened.

Take the timing. Barely a day before ChatGPT Go’s launch, YouTube influencer Dhruv Rathee launched AI Fiesta at ₹999 a month, bundling ChatGPT, Gemini, Claude, and more. His pitch was simple: Indians won’t pay $20–30 for each tool, so offer them all in one affordable package.

However, OpenAI might have just killed it with its Jio-style pricing. At ₹399, ChatGPT Go potentially makes bundled services a tough sell. 

But beyond the pricing wars lies a bigger question: why does ChatGPT need India so badly?

OpenAI’s Second Largest Market, But Biggest for Indian AI Startups

India isn’t just OpenAI’s second-largest market. It’s the testbed. Low per-capita spend, massive adoption. If even a fraction of Indians start paying ₹399 a month, that translates to millions of new subscribers. Rathee’s own survey showed that 70% never upgrade. OpenAI is betting that this will change now.

Not everyone is convinced. Ankush Sabharwal, CEO of CoRover, argues that pricing alone won’t drive adoption. “Is India ready to pay subscription fees for such products? Honestly, not yet,” he told AIM. 

“In my opinion, it isn’t cheap; it’s still costly. Most B2C AI companies grow on data, and they usually get that data by offering free services. So people should not be surprised if this price drops further, maybe even down to zero, soon,” he added.

And therein lies the paradox. The lower the pricing goes, the larger the impact on AI startups, specifically those aiming to build India’s AI on the idea of “being cheaper”. If building indigenous AI models drags on, someone like OpenAI can overtake them any day.

India’s importance to OpenAI is no secret. The fact that the country is its second-largest market is something Sam Altman has no intention of giving up. In February, he revealed that India’s user base had tripled in a year, but most were on the free tier. That doesn’t move OpenAI’s revenue needle, so the ₹399 plan is the bait. 

Sabharwal, though, believes chasing hype would be the fastest way for AI startups to fail. “The reality is that 70–85% of AI products fail….Competition from global players is only a threat if we chase hype or a ‘me too’ approach. If we build with purpose, rooted in India’s unique challenges across governance, healthcare, education or business, there’s no need to fear foreign companies.”

“To achieve our purpose and solve some real problems, even if we have to partner with the global companies, we should,” he added.

The Harsh Reality

However, this highlights a harsh reality for Indian startups and their survival when OpenAI is selling premium AI at Jio-level costs. As AIM has reported, India simply doesn’t have enough consumers of AI products. Many home-grown AI startups are building in a vacuum, or bypassing consumer products altogether.

In recent months, companies like Krutrim, Fractal, Sarvam and Gnani.ai have started positioning themselves as pioneers of agentic AI. They’ve launched assistants, image generators and voice bots aimed at India’s “mobile-first” population. But most of these launches are still enterprise-first.

Consumer adoption remains a big question mark, which is why most of them stay away. Yet, it is the biggest market for Indian AI startups. Selling here should be the first priority, and chasing that goal is getting increasingly complex.

Ironically, the same risk also hangs over OpenAI.

The market is already crowded with free alternatives: Perplexity comes free with Airtel, Meta AI is embedded into WhatsApp, and Google is handing out free AI Pro subscriptions to students. Against this backdrop, ChatGPT Go sits awkwardly in the middle—not free, not premium. 

However, some see this as an opportunity rather than a threat. Ganesh Gopalan, founder of gnani.ai, believes the move could lift the industry as a whole. “An ₹399 chatbot like ChatGPT Go is more of a boon than a threat for the Indian AI ecosystem, especially startups,” he told AIM, adding that OpenAI’s pricing will also push the government’s IndiaAI Mission forward. 

“While the low pricing could intensify competition, it significantly broadens the market by making AI accessible to millions of price-sensitive users who may not have experimented with such tools before. This rising adoption creates greater awareness and helps normalise AI in everyday workflows,” he added.

Pawan Prabhat, co-founder of Shorthills AI, is also showing caution for OpenAI. “Casual users already have Perplexity free with Airtel and Meta AI in WhatsApp. Professionals will prefer the full ₹2,000 suite. That raises the question: who is ChatGPT Go really for?”

Fail Fast

The answer might be simple. ChatGPT Go isn’t about creating a perfect tier; it’s about making millions of free users into paying ones, at any price point. And that’s where Indian startups are either going to get crushed or the adoption might finally take off.

Competing with free services is already hard. Competing with OpenAI at ₹399, when the brand itself has become a verb, borders on impossible.

For the longest time, Indian AI startups have positioned themselves around Indic use cases, but that focus has limited their ability to scale. As for those not focused on Indic use cases specifically, they are moving abroad for users and enterprise use cases, as even selling to Indian enterprises requires endless proof-of-concepts before a deal is finalised.

Meanwhile, Altman has been blunt about his global ambitions. In his testimony to the US Congress, he said he wants the world to run on the ‘US stack’—US chips, US services and US AI. India, with its scale and diversity, is not just a market. It’s the ultimate test bed. If AI works here, it can work anywhere. 

And that’s exactly why global players keep pouring resources into India, while local startups struggle for visibility. The time has come, then, for India to build its own ‘India stack’ for its AI startups. 

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