India has emerged as the world’s second-largest market for ChatGPT, driven by a sharp rise in users and widespread adoption of AI tools across sectors. While the country’s consumption of AI services is growing rapidly, it continues to lag behind the United States and China in core research, model development and patent output.
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AI-based applications are increasingly being used in education, IT services, startups, customer support and content creation. Industry estimates place the United States at the top in terms of user base, with India now firmly in second position. Analysts attribute this growth to affordable internet, a mature digital payments ecosystem and a large young population that is quick to adopt new technologies.
The surge in AI demand is also reflecting in physical infrastructure. India currently ranks seventh globally with 276 operational data centres, and the number is rising steadily. At the current pace, the country is expected to overtake Canada (286) and France (338) in the near future, signalling strong capacity expansion to support AI and cloud workloads.
Despite strong adoption, India’s progress in AI research remains relatively slow. The United States continues to dominate the launch of new AI models, while China leads in research publications and AI-related patents. Although India has improved its share between 2010 and 2023, the pace of growth is considered modest compared to global competitors.
Data from Stanford University shows the US holding the largest share of AI patents, followed by China. India’s contribution remains comparatively small, underscoring the gap between AI usage and original innovation. Experts say this highlights the need for greater investment in advanced research, academic collaboration and high-end model development.
The rapid evolution of AI is also reshaping the IT sector. Recent launches of advanced AI systems triggered a decline in IT index stocks, amid concerns over automation and its potential impact on traditional roles. However, analysts believe AI will also create new jobs requiring specialised skills, leading to a structural shift rather than a net loss in employment over the long term.
Both government and industry are stepping up efforts to strengthen the AI ecosystem through investments in data infrastructure, semiconductors, cloud computing and AI startups. Policy support and funding for deep-tech research are expected to play a crucial role in bridging the innovation gap.
Experts note that if India accelerates work on patents, foundational models and high-quality research, it can move beyond being a large consumer market to becoming a global hub for AI innovation.
The current trajectory indicates that India is not only a major user of AI technologies but also has the potential to emerge as a key player in the global technology landscape in the coming years.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
