AI remains a top investment priority for CEOs in India

Bengaluru: Artificial Intelligence (AI) remains a top investment priority for Indian CEOs, as 57% of CEOs are planning to allocate 10–20% of their budgets to AI over the next one year. About 73% CEOs expect returns on AI investments within one to three years, and 86% believe their boards are well-equipped to navigate advanced technology adoption, including leveraging data and AI for sustainable growth, according to KPMG 2025 India CEO Outlook of 125 business leaders across industries and sectors.

The report revealed that confidence among CEOs in India in their own companies’ growth prospects has climbed to 83%, up from 68% in 2024.

Yezdi Nagporewalla, CEO, KPMG in India, said that in an era of global uncertainty, CEOs in India are demonstrating remarkable resilience and a future-focused mindset. "By embracing emerging technologies like AI, prioritising cybersecurity, and advancing ESG goals, they are confident of navigating complexity. At the same time, a renewed focus on talent strategy, redesigning roles, embedding innovation, and fostering continuous learning is helping organisations stay competitive and ready for what lies ahead," he added.

The report also highlighted that 91% of Indian CEOs advocate for investing in skill development and lifelong learning to safeguard future talent. About 74% of CEOs recognise that AI workforce readiness will significantly influence organisational prosperity over the next three years. However, 68% agree that competition for AI talent could constrain future growth.

Cisco, too, in its AI Readiness Index, released on Wednesday, pointed out that 91% of organisations in India plan to deploy AI agents, and nearly 41% expect them to work alongside employees within a year. But for the majority of these companies, AI agents are exposing weak foundations — systems that can barely handle reactive, task-based AI, let alone AI systems that act autonomously, and learn continuously. About 25% of respondents said their networks can’t scale for complexity or data volume, and just 20% describe their networks as flexible or adaptable.

It said a small but consistent group of companies — the ‘Pacesetters,’ about 17% of organisations surveyed in India, and 13% globally, for the last three years — outperform their peers across every measure of AI value.

Nearly all Pacesetters (99%) have a defined AI roadmap (67% in India), and 91% (45% in India) have a change-management plan.

The report also introduces a new concept — AI Infrastructure Debt — the modern evolution of technical and digital debt that once held back digital transformation.

"It’s the silent accumulation of compromises, deferred upgrades, and underfunded architecture that erodes the value of AI over time. Some early warning signs are already visible: 41% expect workloads to rise by over 30% within three years, 64% struggle to centralise data, only 26% have robust GPU capacity, and just over one in three can detect or prevent AI-specific threats," the study mentioned.

These early warning signs point to a gap between AI ambition and operational readiness. "But when the systems that power AI aren’t secure, the debt can increase risk. Pacesetters aren’t immune, but their foresight, governance, and investment discipline help position them to avoid problems compounding into more costly risks," it added.