Indian companies are investing in AI for the long term, intend to use Open-Source tools to drive ROI and innovation: IBM Study

New research commissioned by IBM found that companies surveyed are investing in AI for the long term, with a growing interest in using open-source tools to drive ROI and innovation going forward.

The study of IT decision makers (ITDMs), conducted by Morning Consult and developed in collaboration with Lopez Research, revealed that 87% of Indian respondents report making significant progress in executing their 2024 AI strategy, with 76% already seeing positive ROI from their AI investments. In addition, Indian companies are experimenting with AI to find new uses cases as 89% of those surveyed said that their companies have started more than 10 pilots in 2024.

Moving forward, 93% of Indian respondents indicate they will increase their AI investments in 2025, while 71% are planning to leverage open-source ecosystems to optimise their AI implementations. The data also confirms that having the right tools and strategy in place for responsible AI will be key to scaling its implementation in 2025 as governance becomes the top concern for those surveyed from India. Implementing responsible AI practices require a holistic, end-to-end approach that addresses various stages of AI development and deployment that prioritises explainability, fairness, robustness, transparency and privacy.

“India is rapidly embracing AI with a clear focus on driving innovation and ROI. The growing use of open-source AI tools is crucial for improving productivity and financial returns. However, it’s clear that this technology needs to be leveraged responsibly if we are to scale its use,” said Sandip Patel, Managing Director, IBM India & South Asia. “At IBM, we’re committed to empowering businesses with solutions across the full AI stack to capitalise on the AI opportunity, with an approach based on transparency, trust and choice,” he added.

Study findings for India:

Enterprises are ramping up AI investment, but with a greater strategic focus

1. 97% of surveyed Indian organisations are planning to either increase or maintain their investment in AI in 2025.
2. Surveyed Indian companies are focusing on specific areas for allocating their AI investments in 2025, particularly IT operations (83%), software coding (56%) and data quality management (55%).
3. When asked what strategic changes will be made in 2025, surveyed ITDMs identify utilising open source (71%), managed cloud services (70%), and hiring specialised talent (66%) among the most common ways they plan to optimise their AI investments.

Companies face a broad range of challenges as they implement AI, top of which is the need for robust governance highlighting the need for responsible AI.

1. The top 5 barriers are lack of AI governance (53%), lack of AI expertise (51%), technology integration (51%), data management (41%) and failure to deliver business value (39%).

 Open source is becoming crucial to companies’ AI strategies

1. 48% of companies in India said that more than half of the AI solutions they are using are based on open-source.
2. As company size increases, so does the likelihood that the majority of AI solutions are based on open source.

Organisations report successfully advancing their AI projects, but often through less traditional ROI metrics

1. 87% of surveyed Indian ITDMs report making progress in executing their AI strategy, while only 1% report no progress.
2. 63% of Indian respondents say their company typically moves from AI pilot to full production within 12 months.
3. 62% of surveyed companies say their AI investments are equally innovation and ROI driven; while 15% said its driven mostly by innovation, and 13% said they are mostly ROI driven.
4. Faster software development (34%), rapid innovation (32%), and productivity time savings (17%) ranked as the three most important metrics Indian ITDMs use to calculate ROI from AI investments. Hard dollar/quantifiable savings was at 11%.
5. More than three-fourth (76%) of surveyed Indian companies say they are achieving positive ROI from their AI projects; 19% say they are breaking even and just 4% say they are recording negative ROI.
6. Among Indian companies not yet achieving positive ROI, 33% expect to begin seeing dollar savings within the next 12 months; 100% believe they will turn a positive ROI within 3 years.