On Friday, the company said it would set up a local team in India and open a corporate office in the capital, New Delhi, in the coming months. The move builds on OpenAI’s recent hiring efforts in the region. In April 2024, the company appointed former Truecaller and Meta executive Pragya Misra as its public policy and partnerships lead in India. OpenAI also brought on former Twitter India head Rishi Jaitly as a senior advisor to help facilitate discussions with the Indian government on AI policy.

India — the world’s second-largest internet and smartphone market after China — is a natural fit for OpenAI, which is competing with tech giants like Google and Meta, as well as AI upstarts like Perplexity, all looking to tap into the country’s massive user base.

The company said that it has started hiring a local team to “focus on strengthening relationships with local partners, governments, businesses, developers, and academic institutions.” It plans to get feedback from Indian users to make its products relevant for the local audience and even build features and tools specifically for the country.

“Opening our first office and building a local team is an important first step in our commitment to make advanced AI more accessible across the country and to build AI for India, and with India,” said Sam Altman, CEO of OpenAI, in a statement.

OpenAI also announced it would host its first Education Summit in India this month and its first Developer Day in the country later this year.

While India is clearly an essential market for OpenAI, the company faces key challenges — including how to convert free users into paying subscribers. Like other major AI players, it must navigate the monetization hurdle in a price-sensitive South Asian market.

Earlier this week, the company introduced its sub-$5 ChatGPT plan called ChatGPT Go, priced at ?399 per month (approximately $4.75), making it the first ChatGPT plan in India to attract the masses. This came just days after arch-rival Perplexity partnered with Indian telco giant Bharti Airtel to give Airtel’s more than 360 million subscribers access to Perplexity Pro for 12 months.

OpenAI also faces challenges in integrating with Indian businesses. In November, Indian news agency Asian News International (ANI) sued OpenAI for allegedly using its copyrighted news content without permission. A group of Indian publishers joined that case in January.

Nonetheless, the Indian government is actively promoting AI across its departments and aims to strengthen the country’s position on the global AI map — momentum that OpenAI hopes to leverage.

“India has all the ingredients to become a global AI leader — amazing tech talent, a world-class developer ecosystem, and strong government support through the IndiaAI Mission,” Altman said.

India is not OpenAI’s first Asian office location. The company previously opened offices in markets including Japan, Singapore, and South Korea. OpenAI rival Anthropic also considered Japan a higher-priority market than India in the continent and recently set up its office in Tokyo rather than New Delhi.

One of the reasons these AI companies do not prioritize India as an early market is the difficulty in securing enterprise customers, a Silicon Valley-based investor source recently told TechCrunch.

“OpenAI’s decision to establish a presence in India reflects the country’s growing leadership in digital innovation and AI adoption,” said Indian IT Minister Ashwini Vaishnaw, in a prepared statement. “As part of the IndiaAI Mission, we are building the ecosystem for trusted and inclusive AI, and we welcome OpenAI’s partnership in advancing this vision to ensure the benefits of AI reach every citizen.”