Bank of America: India has become the world’s most active AI large model market, with its vast young population turning into Silicon Valley’s “testing ground.”

Bank of America: India has become the world’s most active AI large model market, with its vast young population turning into Silicon Valley’s “testing ground.”

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With low data costs and a massive young population dividend, India has surpassed other countries to become the world’s largest market for the adoption of large language models (LLMs). An analysis report released by Bank of America on Wednesday pointed out that India is not only the most active AI consumer market at present, but has also become the key frontier for global technology giants to test next-generation artificial intelligence technologies.

According to Bank of America’s latest analysis, India now leads the world in the number of users for popular AI applications like ChatGPT, Gemini, and Perplexity, with its advantage reflected in both monthly active users (MAUs) and daily active users (DAUs). Local telecom giants such as Bharti Airtel and Jio under Reliance Industries are accelerating this trend, further solidifying market penetration by offering users free subscriptions to premium AI apps.

Bank of America noted in its report that Bharti Airtel and Jio may be potential market winners in this trend; such collaborations not only increase user stickiness but also allow the companies to benefit from the mid-term scale expansion of AI. However, Bank of America also warned that as global AI companies make aggressive entries into the market, local Indian startups may face more severe pressure and their survival space could be further squeezed.

The report highlights India’s huge and diverse user base, which makes it an ideal “test field” for so-called “Agentic AI”—AI applications capable of independent reasoning, planning, and execution of tasks. Before global rollout, these emerging technologies will be subjected to intensive stress-testing within India’s real-world environment.

Economies of Scale and Population Dividend

Bank of America believes that India’s swift rise as a key AI market is driven by scale, affordability, and population structure. India has the second largest online population globally, with more than 700 million to 750 million mobile internet users. Extremely low data costs lower the entry barriers for AI: users need to spend only about $2 per month to obtain 20–30 GB of data traffic.

Moreover, the population structure is another core advantage. Over 60% of Indian internet users are under the age of 35; the majority not only understand English but are also very quick to adopt new technologies. This unique digital ecosystem enables mainstream English-based AI models to rapidly penetrate a wide audience.

Telecom operators play a key driving role in India’s AI adoption wave. Bank of America points out that operators such as Jio and Bharti Airtel are creating a win-win situation for users, AI companies, and telecom operators by offering free subscriptions to paid versions of AI applications like Gemini and Perplexity.

This strategy not only lowers the previously high cost of advanced AI tools, creating an equitable competitive environment for consumers, but also helps improve learning outcomes and markedly boost productivity. At the same time, the availability of multilingual AI models is helping eliminate language barriers and bridge the digital divide.

Global "Test Field" for Next-Gen AI

The report specifically mentions that India may become the testing ground for the next phase of AI technology—namely “Agentic AI.” Given India’s large and diverse user base, Bank of America believes the country is extremely well-suited for real-world stress-testing of these autonomously task-executing AI applications before global deployment.

Additionally, Bank of America suggests that global AI companies may follow the United States’ model—where AI agents collaborate with travel platforms like Booking and Expedia—by partnering with Indian local companies to provide fulfillment services. Such deep market integration means that India is not only a consumer market, but also an important experimental base for Silicon Valley tech giants to refine their products and business models.

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