Indian businesses double down on AI investments with focus on open-source solutions: IBM study

Indian enterprises are making significant strides in artificial intelligence (AI) adoption, with a growing emphasis on long-term investment and open-source technologies, according to a new study commissioned by IBM. The report highlights that 87% of IT decision-makers (ITDMs) in India have made substantial progress in executing their 2024 AI strategy, while 76% report achieving a return on investment (ROI) from their AI initiatives.

The study, conducted by Morning Consult in collaboration with Lopez Research, underscores India’s strong commitment to AI innovation, with 93% of businesses planning to increase their AI investments in 2025. A significant 71% of Indian companies are expected to leverage open-source ecosystems to optimise their AI deployments.

The report reveals that 97% of surveyed organisations intend to either increase or maintain AI investment in 2025. Key areas of focus include:

    •    IT operations (83%)
    •    Software development (56%)
    •    Data quality management (55%)

To maximise the benefits of AI, companies are prioritising strategic changes, including:

    •    Increased adoption of open-source tools (71%)
    •    Use of managed cloud services (70%)
    •    Hiring specialised AI talent (66%)

Despite the enthusiasm for AI, the study also highlights significant barriers to its implementation. The top challenges identified by Indian companies include:

    •    Lack of AI governance frameworks (53%)
    •    Shortage of AI expertise (51%)
    •    Technology integration issues (51%)
    •    Data management challenges (41%)
    •    Failure to deliver business value (39%)

“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.

The study indicates a clear shift toward open-source AI solutions in India. Nearly 48% of Indian companies report that over half of their AI solutions are based on open-source technologies. The preference for open-source AI tools is particularly strong among large enterprises, which are increasingly adopting these solutions to enhance flexibility and innovation.

While 76% of Indian businesses report achieving a positive ROI from their AI projects, the study finds that many companies are also focusing on alternative success metrics. The top measures for evaluating AI effectiveness include:

    •    Faster software development (34%)
    •    Rapid innovation (32%)
    •    Productivity improvements (17%)
    •    Direct cost savings (11%)

For organisations that have yet to see positive returns, 33% expect to achieve dollar savings within the next 12 months, and all surveyed companies believe they will generate ROI from AI investments within three years.

“As organisations begin to implement AI at scale, many are placing greater stock in success metrics such as productivity gains, in part because traditional hard-dollar ROI have yet to show up on the balance sheets,” said Maribel Lopez of Lopez Research. “Yet, they continue to rapidly advance their AI strategies, with no sign of slowing down. Companies seem to now recognise the value of defining specific use cases and optimising  AI projects. They are leveraging hybrid cloud strategies and open source to drive AI innovation and deliver financial returns."