Half of Indian firms go live with GenAI, says EY–CII

Nearly half of Indian enterprises have moved from experimentation to active deployment of Artificial Intelligence (AI), with 47 per cent reporting that multiple Generative AI (GenAI) use cases are already running in production, according to a new report by EY (Ernst & Young) and CII (Confederation of Indian Industry).

However, despite this rapid adoption, organisations continue to spend cautiously. The study shows that more than 95 per cent of companies still allocate less than 20 per cent of their total Information Technology (IT) budgets to AI and Machine Learning (ML). Only 4 per cent invest beyond that threshold, signalling conservative spending even as confidence in AI grows.

The report titled “The AIdea of India: Outlook 2026” is based on responses from 200 Indian organisations across more than 20 sectors, including government bodies, Public Sector Undertakings (PSUs), startups, Global Capability Centres (GCCs), and Indian arms of multinational corporations. The survey gathered insights from C-suite executives and senior leaders.

According to the findings, Indian enterprises are increasingly confident about AI’s potential. As many as 76 per cent of business leaders believe GenAI will have a significant impact on business performance, while 63 per cent say they feel ready to leverage it effectively.

In their build-versus-buy approach, 91 per cent of decision-makers identified rapid deployment as the single most important factor.

Over the next 12 months, organisations expect to focus AI-related investments primarily on operations (63 per cent), customer service (54 per cent), and marketing (33 per cent), with the goal of embedding AI into functions that directly influence performance.

The report notes a growing shift in how companies evaluate AI projects. Instead of relying solely on cost reduction and productivity, enterprises are now adopting a five-dimensional Return on Investment (ROI) model that includes time saved, efficiency gains, business upside, strategic differentiation, and resilience.

Collaboration is also rising sharply. Nearly 60 per cent of organisations reported active partnerships with startups and OEMs (Original Equipment Manufacturers), moving beyond in-house development to accelerate innovation. Hybrid deployment models dominate, with 78 per cent of enterprises using a combination of internal and external resources to scale faster.

The study also highlights significant changes in workforce structures. A “new workforce pyramid” is emerging, with 64 per cent of enterprises selectively transforming roles that involve standardised, repetitive tasks. However, talent shortages remain a concern, with 59 per cent acknowledging a gap in skilled AI professionals.

To address this, enterprises are restructuring their operating models around AI-first architectures — systems where humans and machines work together to improve decision-making, speed, and precision. Mid-office and innovation roles are expanding as companies integrate AI deeper into core business processes.