84% Indian CEOs Are Investing In Generative AI To Gain Competitive Edge: EY Report

Generative artificial intelligence is a central investment theme for Indian chief executive officers, with 100% of them making or planning significant investments in Gen AI, an EY survey of CEOs of Indian companies shows. To fund these investments, 84% of CEOs indicated that they are raising new capital or reallocating investments from other budgets or technology investments towards Gen AI initiatives.

Of the CEOs surveyed, 82% either strongly agreed or agreed that Gen AI would help them become better business leaders, and 84% said Gen AI could potentially provide them a competitive advantage.

Gen AI: Changes And Challenges

While Gen AI brings in opportunities, businesses are also faced with challenges and complexities around the technology. Of the CEOs surveyed, 80% acknowledged the uncertainties around Gen AI, which creates obstacles to swiftly developing and implementing an AI strategy.

According to the report, 80% of CEOs admitted that Gen AI will compel them to disrupt their own business models to sustain a competitive advantage. Furthermore, 52% felt that the combination of rapid technological changes and the regulatory environment constrains capital allocation to Gen AI.

The biggest challenge faced by organisations in capital allocation towards Gen AI is the rapid pace of technological change. According to 20% of CEOs, keeping pace with developments poses a significant hurdle. An equal number of CEOs find the dynamic nature of the regulatory environment challenging. For 12% of CEOs, the substantial upfront investment required for AI is a key concern.

CEOs Struggle To Build Robust AI Strategy

Although CEOs acknowledged that AI is crucial for competitive advantage and effective leadership, uncertainty makes it difficult to pursue an AI strategy. Of the respondents, 80% said uncertainties around AI make it hard to implement a robust strategy. At the same time, 88% believed they have sufficient technical understanding of Gen AI to effectively guide their AI strategy. 

Around 50% of CEOs also stated that they are either experimenting or optimising AI, which indicates there is some distance to go when it comes to their maturity journey.

Revenue Growth Expectations

Of the CEOs surveyed, 48% believed that AI will have a significant impact on their revenue growth in the next two years, which indicates an alignment between Gen AI investments and anticipated business growth.

A majority (92%) of companies have either already invested or are in the process of investing in the capability to augment third-party AI with their proprietary data. Additionally, 82% of CEOs said that their current access to investment capital is accelerating progress in Gen AI, which indicates that businesses with robust finances are better positioned to navigate the challenges and complexities of the AI landscape.

"Embracing an AI-first approach, businesses must build a robust foundation, focusing on platforms, people and processes. However, strategic policy initiatives are crucial, necessitating increased government involvement, infrastructure support, data accessibility and responsible AI governance,” said Mahesh Makhija, partner and national leader, technology consulting, EY India.