India students get free AI: Is it data, lock-in, or adoption strategy?

From ChatGPT and Gemini to Copilot, Big Tech is handing students free premium AI in India. Firms call it adoption and feedback; critics warn of data capture and lock-in

The launch of OpenAI’s chatbot ChatGPT 3.5 nearly three years ago forced technology companies worldwide to hasten the deployment of their own large language models (LLMs) to users.

 

Since then, despite the costs of developing new LLMs, most tech companies have begun offering free pro versions of these services to users worldwide. The trend has continued in India as well, where nearly all companies have offered free subscriptions to their LLMs for a limited time, specifically for the student community.

 

The first in the block was Google’s Gemini, which said it would offer students aged 18 or older a free one-year subscription to the Google AI Pro Plan. OpenAI followed suit and, in August, said it would give away free five lakh ChatGPT licences to students and educators for six months.

 

Microsoft also offers students a free year-long subscription to its flagship LLM, Copilot.

 

Why are LLM firms targeting students with free premium subscriptions?

 

But why students, most of whom likely cannot afford a pro version on their own? The answer, while sounding a bit self-serving, is actually a two-way street for both parties. Students get to use AI for free, while the firm providing it gets use cases and enormous amounts of data from millions of students.

 

How do free student plans help LLMs improve through use cases and testing?

 

Giving students free access to the latest versions of these LLMs helps generate fresh use cases, uncover edge conditions, and push these technologies into new domains, enriching the innovation ecosystem, according to experts.

 

“Student use can surface gaps, biases, and ethical blind spots in these systems, providing the companies with real-world insights to make their models more robust and responsible,” said Jaspreet Bindra, co-founder of AI&Beyond. 

Offering free services may help these companies capture the overall market quickly but the strategy is not likely to be sustainable as users will not continue to use the service when it is no longer free, Ankush Sabharwal, the founder and Chief Executive Officer of CoRover.ai said, adding that the data collected may not be as valuable due to the lack of engagement.

 

“One obvious motivation for offering free LLMs is data collection and habit formation. Companies aim to collect user data and make users accustomed to their LLMs. To drive genuine adoption and justify pricing, companies must focus on solving real problems,” he said. 

Is “free” access also a platform lock-in strategy for developers?

 

The free LLMs can also be viewed as a strategic move by these technology giants to become the default platform people and developers rely on, Ankush Sabharwal, the founder and chief executive officer of CoRover.ai, said.

 

“It’s the same playbook we saw with cloud and smartphone operating systems. Many people are using it now only because it is free. They will not continue once it becomes paid, as no real value is being delivered that’s the reason it is being offered at no cost. To drive genuine adoption and justify pricing, we must focus on solving real problems,” he said.

 

Once these students, who will be the next generation of developers, start building on the ecosystem offered by these companies, it creates long-term dependency and ensures their APIs become the default choice, Sabharwal said.

 

Does free consumer usage funnel users into enterprise monetisation later?

 

“Free usage at the consumer level eventually becomes a funnel for enterprise monetisation, where the real revenue lies. Additionally, many players are racing to establish dominance before stricter AI regulations come into force. And with the industry moving rapidly towards AI Agents, these models need massive real-world interactions to improve something India provides at an unmatched scale,” he said.

 

Are critics right to warn about data extraction and “neo-colonisation”?

 

Others, such as former Niti Aayog chief executive officer Amitabh Kant, have, however, warned that such free offers from companies are “neo-colonisation in a very stealth mode”.

 

Speaking at the Singapore Fintech Festival earlier this year, Kant had cautioned that these companies would use Indian data to improve their offerings and then sell them back to us at higher prices.

 

“All these models are getting better with Indian and many other developing countries’ data. And then they will be selling their AI products, using your data, back to you at very high prices. So what is happening is you are using data at zero cost and exporting at billions,” Kant had said at the time. 

  India must also move quickly to establish its own large-scale distribution for AI models, or risk losing access to Indian user data and the feedback loops needed to train better models, said Puch AI founder Siddharth Bhatia.