Google and Perplexity paid Jio and Airtel a fortune to reach Indian users. OpenAI paid nobody

**Snigdha Sharma** (0:01)
Perplexity AI spent 17,000 rupees to acquire a single user in India. Google spent 35,000. Both basically handed that money to a telecom company and asked it to do the distribution. And I'm telling you this to give you a sense of the sheer size of the bet that AI companies are placing on India's telco bundling model. And the results so far are mixed enough to make you wonder whether the bet was ever the right one. Here's the setup. India's telecom industry has been long caught in a paradox of its own making. The world's cheapest mobile data built one of the world's largest internet markets and also made monetizing those users extremely difficult. Between Airtel and Jio, the country has nearly 900 million subscribers. Telcos have always been considered distribution kings, the primary digital gateway in a mobile-first economy. So when AI companies came looking for skill, telecom felt like the obvious entry point.
2025 became the year of AI telecom deals. And I'm sure you remember it. Airtel tied up with Perplexity, Jio partnered with Google Gemini. Both launched with considerable fanfare. Reliance's quarterly presentation claimed tens of millions had signed up to Gemini Pro via Jio. Airtel said Perplexity had reached a few million users within the first few days. So the numbers sounded pretty impressive. Then, as my colleague Dibhanjali Biswas found while reporting the story, one partnership ended early and the other is still going. And the company with the largest AI user base in India, OpenAI, with over 100 million weekly active users, has stayed out of the telecom bundling entirely in its second largest market in the world. So the question is, what does OpenAI know about this model that the others are still learning the hard way?
Welcome to Daybreak, a business podcast from The Ken. I'm your host, Snigdha Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Varghese and I will come to you with one business story that's worth understanding and worth your time. Today is Tuesday, the 23rd of June.
The logic for AI companies is clear enough. Scale feeds loyalty. The more often a user interacts with a model, the harder it becomes for a competitor to displace it. So getting into the habit loop early matters, which is why AI companies are willing to subsidize heavily to get there. There are other incentives as well. Bundling into a phone bill removes friction for users eventually moving to paid tiers. Paying through a telecom bill feels seamless in a way that entering credit card details on a new platform does not. India-specific data, consumption habits, speech patterns helps to train models to serve Indian users better. And for the companies like Google, that data feeds directly into advertising. For example, when a Gemini user asks for shopping ideas, that intent flows back into Google Ads. The AI rollout pays for itself downstream.
For Telcos, the benefits are real as well. AI services drive data consumption, pushing users onto higher plans. Jio ran a claim-based deal. Gemini was offered only to users on Jio Fiber and 5G-enabled plans, starting from Rs. 349
Airtel, on the other hand, ran an entitlement-based deal, which means Perplexity went to all users regardless of the plan.
Jio's approach targeted high-value users and gave cheaper plan subscribers a reason to upgrade. In the fourth quarter of the financial year 2026, Jio's average revenue per user rose 4% year-on-year to Rs. 214, with the company attributing a part of that to higher data consumption from AI-enabled use.
On the back end, Telco sometimes received cloud credits and co-investments in data centers. So, on paper, the structure looks mutually beneficial, but in practice, it's a different story. More on that in the next segment.
Six months into its year-long free offer with Airtel, Perplexity asked users for their credit card details.
Most of them canceled. Multiple people that my colleague, Debanjali spoke to, said that the partnership ended before its 12-month term. And what went wrong tells you something important about this market. Airtel's subscriber base skews towards urban and higher income, which is exactly the audience that most likely will convert to a paid AI subscription. Perplexity had the right distribution partner for its target user and still could not make it work. The company lacked the financial depth to sustain the subsidy and the ecosystem to make the product feel essential. On the other hand, the Jio Gemini partnership succeeded for reasons that go beyond bundling. You see, Google brought deep pockets and a walled garden. Jio users on the deal got access to Gemini Pro, Notebook LM and 5TB of Google Cloud Storage. Crucially, Gemini is baked into Android, which means it is rooted through Google Search, Maps and other apps that users are already inside every day. That is a structural advantage no partnership alone can replicate.