India is Becoming the World’s AI Workbench. Can it also be a Co-Owner?

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When the US tightened H-1B visa rules for skilled workers around the world, particularly those from India, American tech firms seemed to have a light-bulb moment: if the talent can’t come to them, they’ll go to where the talent is.

What began as back-office outsourcing in the 1990s has evolved into a strategic expansion of AI operations in India through research hubs, data-center partnerships, and large-scale hiring.

India has become the new playground for American AI firms. OpenAI, Perplexity, and Anthropic are all racing to establish offices and hire local engineers at a rapid pace. When you can’t import the talent, it seems you establish the base where the talent already is.

The AI Trio Betting on India

In late August, OpenAI announced plans to open its first corporate office in Delhi by the end of the year. India is already its second-largest market by users, and the new office will expand the team beyond its first Indian hire, Pragya Misra, who leads public policy and partnerships. Complementing the move is OpenAI Academy India, a program launched with the IndiaAI Mission under the Ministry of Electronics and IT. Led by Raghav Gupta, former Coursera Managing Director, it marks OpenAI’s first education-focused initiative outside the US.

OpenAI’s ambitions extend beyond talent. India’s data-localization rules have prompted the company to explore a gigawatt-scale data-center project under its $500 billion Stargate supercomputing initiative. Reports indicate preliminary talks with Reliance Industries, Sify Technologies, Yotta Data Services, E2E Networks, and CtrlS Datacenters, as Indian authorities seek to attract billions in investment tied to local data storage.

Meanwhile, Chennai-born Perplexity AI has become one of India’s most-downloaded AI apps. Its partnership with Bharti Airtel Ltd, offering a free one-year Perplexity Pro subscription valued at over ₹17,000 for Airtel users, helped it top India’s iOS charts.

Following that playbook, Google and Reliance Jio rolled out an 18-month Gemini 2.5 Pro plan valued at ₹35,100 in benefits, initially for 18-to-25-year-olds on Unlimited 5G plans, with a broader rollout to follow. The offer includes higher limits for AI image and video generation, access to NotebookLM for research, and 2 TB of cloud storage.

OpenAI also introduced ChatGPT Go for India, offering a 12-month free promotional period to expand its user base in the country.

Anthropic, backed by Amazon and Alphabet and valued at $183 billion, plans to open an R&D office in Bengaluru early next year, its second in Asia after Tokyo.

CEO Dario Amodei has cited India’s technical talent and government support as key drivers, saying the company will focus on AI applications in education, healthcare, and industry partnerships.

ElevenLabs, too, has seen rapid growth, calling India its No.1 market by sign-ups and No. 2 by enterprise revenue. Its voice AI now handles about 60,000 calls a day for Meesho and processes roughly 20,000 hours of multilingual conversations each month for Cars24, helping both firms cut response times nearly in half.

None of the companies have detailed their investment outlays, but their expansion plans indicate a rising flow of capital and compute resources into India.

A Market Too Large to Ignore

India’s appeal is easy to understand. The country has more than 900 million internet users, a fast-growing base of technical talent, and a digital public infrastructure few nations can match, according to a BCG report. Its AI market could reach $17 billion by 2027, employing around 1.2 million professionals.

“India offers a rare mix of scale, digital maturity, and cost efficiency,” said Somshubhro Pal Choudhury, Co-Founder and Partner, Bharat Innovation Fund. “That combination makes it the best place to test new systems.”

But scale also brings complexity. “If most Indian data, accents, and use cases are captured by foreign models, then India becomes the world’s test lab while others own the final product. The value is created here but captured elsewhere,” said Rashmi Kulkarni, co-founder of IndoAI Technologies, a firm developing edge AI solutions that analyze data on devices rather than in remote servers.

India’s digital public projects such as Aadhaar, UPI, and ONDC have created one of the richest structured-data environments in the world. That makes the country irresistible to AI investors and model trainers, but also raises difficult questions about data ownership and governance. Every chatbot conversation or voice clip used to “improve” a model contributes to a global system that may not belong to India at all.

The Impact of the AI Gold Rush on India

For Indian startups, the global AI influx is both validation and a source of competition.

“The first effect will be on talent,” said IndoAI’s Kulkarni. “Global firms will hire the top 5-10% of engineers in Bengaluru, Pune, and Hyderabad, offering salaries that local startups can’t match. The second is on visibility. If telecom companies start bundling ChatGPT or Perplexity into mobile plans, domestic players will struggle to build their own user base.”

Pal believes that while large firms may crowd out smaller ones, scarcity can drive innovation. “Indian startups are learning to work with smaller models, local data, and industry-specific problems. That’s how they’ll stay relevant.”

Ankush Sabharwal, founder of conversational AI platforms CoRover.ai and BharatGPT.ai remains optimistic. “The big global tools being offered for free aren’t solving deep local problems,” he said. “If you’re building AI for governance, healthcare, or public services, you’re safe, and you’re not at threat.”

Still, the economics are shifting fast. OpenAI’s proposed Stargate data center initiative could strengthen India’s cloud ecosystem, but it could also concentrate computing power in the hands of a few multinational companies. Meanwhile, free or discounted access to ChatGPT Go and Perplexity Pro is reshaping user expectations.

“These companies aren’t doing this out of generosity,” Sabharwal said. “They’re collecting user data and habits. The real question is what happens when the free ride comes to an end. Few will renew as these apps aren’t necessities like mobile plans.”

The Question of Control

India has the people, the data, and the infrastructure to be a serious AI power. What remains uncertain is whether it will control the systems it helps create.

Foreign firms are embedding deeply into India’s digital economy through partnerships, research centers, and education programs. Each promises skills and inclusion, but collectively they risk deepening dependence on external technology.

“For now, the AI rush looks like progress, with new jobs, new investment, new opportunity,” said Pal. “But if India doesn’t build its own capacity, it might end up renting access to its own intelligence.”