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As artificial intelligence continues its march into the heart of marketing and advertising, consumer brands in India are standing at the cusp of a transformation. The recent partnership between Mattel and OpenAI, which aims to infuse AI into iconic toy brands, is just one example of a broader trend that is rapidly reshaping how brands connect with consumers.
According to recent industry research, retail and consumer brands are set to increase their AI investments by 52% in 2025, expanding AI use from IT into customer service, supply chain, and marketing. This surge is driven by the recognition that AI-driven partnerships can unlock new business models, deepen emotional connections, and future-proof relevance in a world where digital-first engagement is the norm.
From Personalization to Predictive Engagement
For marketing specifically, the AI market is worth $47.3 billion in 2025 and is forecast to surpass $107.5 billion by 2028, expanding at a 36.6% CAGR. The agentic AI market is rapidly growing as well, estimated at $5.7 billion in 2024 and expected to balloon to $187.5 billion by 2034, with a CAGR of 41.7%.
The promise of AI lies in its ability to deliver hyper-personalized experiences at scale. Shradha Agarwal, Cofounder and Global CEO of Grapes Worldwide, captures this shift succinctly: “With AI making strong inroads into the A&M industry, it comes with a lot of potential to redefine consumer engagement strategies in the future.
Brands will have to be agile enough to adapt to the changing dynamics to stay ahead of the competitive curve in the industry. The AI-brand partnership will enable hyper-personalization with the help of real-time data, which will boost the prospects of connecting with consumers at a deeper level.”
This is not just theory. Coca-Cola’s “Share a Coke” campaign leveraged AI for personalized bottle designs, resulting in a significant boost in sales and social media engagement. Similarly, Starbucks uses AI to analyze customer purchase history and preferences, enabling highly targeted email marketing campaigns that drive engagement and sales. These examples highlight how AI can help brands move beyond one-size-fits-all messaging to deliver content and offers that feel bespoke.
Russhabh R Thakkar, Founder and CEO of Frodoh, adds another layer to this narrative: “AI-driven partnerships won’t simply optimize engagement but they will fundamentally reset how brands interact with their audiences. Real-time personalization, adaptive content, and rapid feedback loops are quickly becoming the new standard. For Indian brands, scale is a strategic advantage: mobile-first consumers, multilingual audiences, and exceptionally high engagement levels offer massive potential.”
Indeed, the Indian market presents unique opportunities and challenges. The rapid adoption of mobile technology, coupled with the diversity of languages and cultural contexts, makes the country a fertile ground for AI-driven innovation. However, as Thakkar points out, “significant challenges remain—fragmented data ecosystems, uneven digital access, and the urgent need to design for inclusivity from the outset.”
Intelligent Surfaces and the Rise of Ambient Advertising
The evolution of consumer engagement is not limited to traditional screens or digital ads. Vinay Tamboli, CEO, DataQuark, LS Digital, notes, “While penetration of smart TVs, voice-enabled devices, and immersive media platforms is still at a relatively early stage in India, we’re observing a clear upward trend—especially in digitally mature urban markets. These connected environments are starting to shape a new class of ad surfaces that are intelligent, personalized, and increasingly ambient.”
Tamboli’s perspective is echoed by Kruthika Ravindran, Director, Key Accounts, TheSmallBigIdea, who says “Honestly, this isn't just about new tech; it's about a fundamental shift in how brands connect with us every single day. Forget those annoying ads that pop up everywhere. With smart appliances, brands can actually become genuinely helpful, almost like a friend in your home. Imagine your fridge subtly nudging you, 'Hey, the egg tray is almost empty, want to restock?'. It's not about being loud; it's about being there, quietly, precisely when you need them.”
This shift from intrusive advertising to helpful, context-aware engagement is at the heart of the AI revolution. Brands like Heinz have already experimented with AI-generated packaging designs, using OpenAI’s DALL-E to create unique ketchup bottle designs based on user prompts. The campaign generated over 800 million earned media impressions globally, demonstrating the power of AI to drive consumer engagement and brand buzz.
Siddhant Sethi from White Rivers Media adds, “Screens and voice assistants are quietly reshaping how brands enter our lives. Not with noise, but with relevance. Not with ads, but with value. Their ability to deliver content that is timely and relevant—such as product suggestions or helpful tips—at moments when users are most receptive, sets them apart from more traditional channels. Brands closely linked to everyday routines, like food, home care, and energy services, are well positioned to benefit, as they can offer value precisely when it matters.”
The growing sophistication of these devices, including support for local languages and regional preferences, is making them accessible to a wider audience and increasing their appeal. This is particularly relevant in India, where regional language support can be a game-changer for brands looking to expand their reach beyond metros.
Balancing Innovation with Trust and Transparency
The global artificial intelligence (AI) market was valued at approximately $638 billion in 2025 and is projected to reach nearly $3.7 trillion by 2034, growing at a compound annual growth rate (CAGR) of 19.2%. The AI software segment alone is expected to generate over $126 billion in annual revenue in 2025.
While the opportunities are immense, experts unanimously agree that trust and transparency must underpin any AI-brand partnership. Agarwal emphasizes, “Data privacy will be a growing concern, where brands will have to be vigilant in handling the information of consumers to ensure data security. There should be sustained focus on transparency of AI models, where brands should be able to understand the algorithm of the technology to exercise proper control over operations, and also be proactive in maintaining compliance of AI companies with data privacy laws of the country.”
Thakkar echoes this sentiment, observing, “For marketers, the guiding principles are straightforward: control, clarity, and context. Who owns the data? Can the AI explain its decisions? Does it build trust or erode it? Innovation without transparency is unsustainable. The real opportunity lies in using technology to deliver relevance without sacrificing reach. That’s where trust, scale, and differentiation converge.”
Looking Ahead: The Future of AI-Brand Partnerships in India
The coming years are likely to see a surge in high-impact partnerships between AI companies and consumer facing brands. Infosys and Adobe’s recent collaboration, which combines Infosys Aster and Adobe’s digital experience tools, is a case in point. The partnership aims to help brands unify customer experiences at scale, personalize content, and streamline marketing workflows. Persistent Systems and CoRover.ai’s alliance to develop advanced multilingual conversational AI solutions is another example of how Indian brands are leveraging AI to enhance customer interactions in a multi-lingual market.
As digital environments become more intelligent and integrated, the most effective brands will be those that prioritize meaningful interaction over mere visibility, and relevance over reach. The future of advertising may not be defined by traditional screens alone, but by intelligent surfaces that blend seamlessly into how people live, interact, and consume content.
Ravindran sums it up, saying, “The goal? To become such a natural, almost invisible, part of your daily routine that you can’t imagine life without them, instead of just being another fleeting ad. The real winners will be the brands that genuinely simplify your tasks, offer real convenience, and blend seamlessly into your day, rather than just yelling about their products.”
For Indian marketers, the message is clear: the time to act is now. By embracing AI-driven partnerships with a focus on innovation, trust, and consumer value, brands can position themselves at the forefront of the next wave of consumer engagement. The Mattel-OpenAI deal may be the headline today, but it is just the beginning of a much larger story, one where AI and brand partnerships become the engine of innovation, loyalty, and growth for the next generation of consumers.
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