India’s Gen AI spending to go up 165%, reaching $386 mn this year: Report

Generative artificial intelligence (Gen AI) spending by Indian companies will increase by nearly 165% to $386 billion in the next 12 months, according to a new research published on Saturday by the Infosys Knowledge Institute.

Companies across Asia-Pacific region will nearly triple their Gen AI investments to $3.4 billion in 2024, the research arm of Infosys said.
The research is based on interviews with business leaders and AI practitioners and a survey of 1,000 respondents in countries including Australia, New Zealand, China, Japan, India, and Singapore.

China leads the region, with investment expected to grow by more than 160% to $2.1 billion, shows the finding from the research arm of Infosys. Spending in Australia and New Zealand will closely trail China. Investments in these two countries are expected to grow by over 150% to $151 million from $60 million in 2024. Many of these companies are more likely to deliver business value from Gen AI investments than European and North American counterparts," the research mentioned.

The biggest obstacles to adoption in the Asia-Pacific region are caution around responsible AI, concerns about impact on reputation, and employee readiness. The research also said that companies are more likely to focus on product development and content generation in the region, compared to other regions.

"Although company leaders across Asia-Pacific have been more cautious than companies in the rest of the world, they are set to outpace firms in other regions," said Andrew Groth, Executive Vice President, Asia-Pacific at Infosys. Groth added that companies in this region are already delivering more value from their spending on gen AI.

In its 'EY CEO Outlook Pulse 2023', a quarterly survey of 50 Indian CEOs published in December 2023, global consultancy firm EY said, as many as 84% of Indian CEOs are raising new capital or re-allocating from other budgets to fund GenAI so that they have an edge against rivals.

The consultancy said that 86% of such executives have either completed or are in the process of hiring new talent with GenAI skills. 
In the current landscape, 50% of organisations find themselves in the exploration or optimisation phase of AI implementation, lacking a definitive AI leadership structure," said the report, adding that GenAI has the potential to add a cumulative $1.2-1.5 trillion to India's GDP over the next seven years.