AI adoption in India driven by transformative potential balanced by cost sensitivity reveals Deloitte’s latest report
- Over 95 percent of businesses surveyed feel pressure from external and internal stakeholders to adopt GenAI, further complemented by 89 percent expecting it to transform their organisation and 66 percent expecting it to transform industries as a whole within three years
- Nearly 50 percent of Indian companies prioritise pricing over performance when adopting GenAI models, unlike global counterparts that prioritise overall performance
- Despite growing investments in GenAI, it accounts for less than 20 percent of overall AI budgets for over 50 percent of the organisations
National, October 10, 2024: In an era of rapid technological advancements, adopting Artificial Intelligence (AI) has become essential for companies to maintain a competitive edge. Deloitte’s third wave of the State of Generative AI Report (India Perspective) sheds light on the distinct priorities of Indian organisations as they embrace Generative AI (GenAI).
Per the survey analysis, Indian participants are highly price-sensitive when adopting GenAI models, highlighting the challenge of balancing innovation with affordability in a price-sensitive market. Nearly 50 percent of Indian respondents cited pricing as the primary factor, followed by the model’s overall performance and flexibility. Meanwhile, global companies emphasized overall performance, trust and flexibility, with pricing following later.
The report projects strong optimism about GenAI’s transformative potential, with ~89 percent of surveyed participants confident it will reshape their organisations within the next three years. Notably, 70 percent of respondents expect this transformation to occur within one to three years within their organisation. Meanwhile, 48 percent of respondents expect similar transformation across their industry, highlighting the growing urgency across sectors. Additionally, over 95 percent of respondents report internal and external pressure to adopt GenAI.
Despite progress in data management, strategy and tech infrastructure, where over 40 percent of respondents reported high levels of preparedness to adopt GenAI, the report reveals considerable gaps. In risk, governance and talent, only 25 percent of participants admitted to being highly prepared in these critical areas. This shortfall signals an urgent need for organisations to bolster their capabilities to fully utilise GenAI’s transformative power.
GenAI has bolstered productivity and improved efficiency, with 42 percent of respondents indicating this as the most important benefit their organisation has achieved through GenAI initiatives. This aligns with initial expectations of GenAI, where 61 percent cited improved efficiency and productivity as a key benefit desired. This is partially made possible with an in-depth integration of GenAI into the organisation’s functions and processes, which 34 percent indicated is the key action to drive value.
Speaking on the findings from Wave 3 of the report, S. Anjani Kumar, Partner, Deloitte India, said,
“Generative AI has the potential to redefine the future of work by unlocking unprecedented efficiencies, productivity and innovation across industries. However, to fully harness its transformative power, CEOs and senior leaders must prioritise its adoption and address the inherent challenges head-on. This means moving beyond surface-level understanding and tackling obstacles such as implementation complexities, investment, risk management and talent gaps.
By fostering a culture of continuous learning, enhancing governance frameworks and ensuring robust risk mitigation strategies, organisations can accelerate GenAI adoption and fundamentally reshape their business models for sustained growth and success in a rapidly evolving landscape.”
Key findings from the survey
Organisational urgency: Over 95 percent of respondents feel the pressure to adopt GenAI, driven by internal and external forces
Preparedness for GenAI: While participants exhibit higher readiness in data management, strategy and tech infrastructure, there is a notable need for improvement in risk & governance and talent.
Investment trends: Investments in GenAI are on the rise, focusing on data management, cloud consumption and AI/ML capabilities. However, less than 20 percent of the overall AI budget is currently dedicated to GenAI in over 50 percent of the organisations surveyed.
Barriers and challenges: One of the primary roadblocks with GenAI is using sensitive data in models, with 68 percent indicating it as a significant concern.
Other key barriers to GenAI adoption include data privacy and security concerns, with 65 percent of respondents citing significant challenges. Firms with less AI expertise struggle with talent acquisition and skills development, while more experienced companies face implementation hurdles.
As India’s GenAI landscape evolves, businesses must accelerate adoption and bridge critical talent development and risk management gaps. The potential is vast, but achieving true transformation demands a holistic approach to AI readiness.
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