India ranks 64th globally in AI adoption: Key takeaways from Microsoft study

The report titled ‘AI Diffusion Report 2025’ states that global adoption of AI increased by 1.2 per cent to 16.3 per cent in H2 2025, up from 15.1 percent in the first half of the year — with roughly one in six people worldwide now using generative AI tools. The United Arab Emirates and Singapore continued to top the list of countries with the largest share of people using AI, followed by other small-sized countries such as Norway, Ireland, France, and Spain.

With a population of over 1.45 billion, India currently ranks 64th on the list. The Microsoft report’s findings come at a time when the country has been identified as a key user growth market for AI giants such as OpenAI, Anthropic, Google, and Perplexity. India is also the second-biggest smartphone market with 730 million devices. On average, Indians consume 21 gigabytes of data each month, paying 9.2 cents per gigabyte, one of the world’s lowest mobile data rates, according to a report by Reuters.

AI Diffusion by Economy H2 2025. (Screenshot: Microsoft report)

Notably, the Microsoft report also flags a widening divide, with AI adoption in the Global North growing nearly twice as fast as in the Global South. Around 24.7 per cent of the working age population in the Global North is now using these tools, compared to only 14.1 per cent in the Global South, as per the report.

AI User Share in the Global South and Global North. (Screenshot: Microsoft report)

“When looking at the economies driving the fastest gains, the imbalance becomes even clearer. Of the ten countries with the largest increases in AI adoption share, all are high-income economies,” the report read.

“Taken together, the data shows a world embracing AI at remarkable speed, even as the divide between leading and lagging regions grows. The challenge ahead is ensuring that this next wave of innovation benefits more people, in more places, and not fewer,” it added.

Other key takeaways

Investments in AI infrastructure, skilling: “Countries that have invested early in digital infrastructure, AI skilling, and government adoption, such as the United Arab Emirates, Singapore, Norway, Ireland, France, and Spain, continue to lead,” the report said. Over 64 per cent of the UAE’s working age population was using AI at the end of 2025, with Singapore recording 60.9 per cent adoption at second place.

Innovation does not guarantee AI adoption: Despite the US leading in terms of AI infrastructure and frontier model development, the report said that the country dropped from 23rd to 24th place in AI usage in H2 2025. A 28.3 per cent usage rate among the country’s working age population also indicates that a smaller proportion of the US population uses AI compared to several smaller highly digitised nations.

Viral Ghibli trend drove AI adoption in South Korea: The second half of 2025 saw South Korea climb seven spots in the global rankings (from 25th to 18th position), with generative AI usage growing from roughly 26 per cent to over 30 per cent of the population. It is also the largest ChatGPT subscriber market in the world, according to the report. The surge in AI adoption has been attributed to three key factors:

-National policies accelerating AI integration
-Frontier model improvements for the Korean language,
-Consumer-facing features that resonated with the population.

“Generative AI is now used in schools, workplaces, and public services, and South Korea has become one of ChatGPT’s fastest-growing markets, leading OpenAI to open an office in Seoul,” the report read.

AI User Base Growth H1 2025 to H2 2025. (Screenshot: Microsoft report)

It also attributed the adoption boost to the AI-generated Ghibli‑style images trend that went viral across Korean social media platforms. “Engagement data suggests many continued exploring additional AI capabilities after the trend faded, turning a viral moment into lasting adoption,” the report claimed.

Deepseek gained traction in developing nations: The breakthrough success of DeepSeek indicates that the global diffusion of AI is influenced by accessibility factors, as per the report. While the Chinese AI startup’s open-weight models have not found popularity in Western countries, they have gained significant traction in markets such as Russia, Iran, Cuba, and Belarus.

“But perhaps even more notable is DeepSeek’s surging popularity across Africa, where it is aided by strategic promotion and partnerships with firms such as Huawei,” the report said. A major reason for DeepSeek’s widespread adoption is its open-source approach. “By releasing its model under an open-source MIT license and offering a completely free chatbot, DeepSeek removed both financial and technical barriers that limit access to advanced AI,” the report said.

Methodology

In order to track the pace of global AI adoption, Microsoft said it measures AI diffusion which is defined as “the share of people worldwide who have used a generative AI product during the reported period.” This metric is derived from aggregated and anonymised Microsoft telemetry, with suitable adjustments made to reflect differences in OS and device-market share, internet penetration, and population.

“No single metric is perfect, and this one is no exception. Through the Microsoft AI Economy Institute, we continue to refine how we measure AI diffusion globally, including how adoption varies across countries in ways that best advance priorities such as scientific discovery and productivity gains,” the report said.