Indian CEOs push ahead with AI investments despite ROI challenges: IBM study

A new IBM study reveals that Indian CEOs are committing to long-term investments in artificial intelligence, even as many struggle with achieving expected returns. The research, conducted by the IBM Institute for Business Value, surveyed 2,000 global CEOs—including a significant number from India—and finds that AI adoption is firmly on the agenda for Indian firms looking to drive innovation and future growth.

According to the report, 74% of Indian CEOs say they need greater budget flexibility to act on digital opportunities that can fuel long-term growth. Despite only 25% of AI initiatives meeting expected return on investment (ROI) in recent years, CEOs remain committed. By 2027, 84% expect AI investments focused on efficiency and cost savings to generate positive ROI, while 78% anticipate similar returns from AI projects targeting business expansion.

Investment in Generative AI Expands
The study shows that Indian companies are moving beyond basic cost-cutting applications of AI. About 64% of surveyed Indian CEOs say their organisations are already realising value from generative AI initiatives beyond operational savings.

The pace of AI deployment is also picking up, with 51% of Indian CEOs stating they are actively adopting AI agents today and preparing to scale them. Proprietary data is seen as a key advantage—71% believe their own datasets hold the potential to unlock generative AI’s full value. However, many still face challenges building the right infrastructure: 53% say recent technology investments have led to fragmented systems.

Indian CEO Sentiment on AI

IBM India & South Asia Managing Director Sandip Patel said Indian CEOs are leading a transformation driven by generative and Agentic AI. “It is no longer if they should adopt AI, but where it can deliver the strongest competitive edge and accelerated growth,” he said, adding that disruption must be viewed as an opportunity.

Strategic Leadership and Talent in Focus

The study also finds Indian CEOs looking inward to ensure their organisations are structured to deliver innovation. About 67% link future success to having a wide base of decision-makers with strategic authority. Another 61% say competitive advantage will depend on having the right expertise in place, supported by the right incentives.

A shortage of AI-specific skills remains a hurdle. CEOs identify lack of clear innovation strategies, risk aversion, and insufficient expertise as the top three barriers to innovation. To bridge this gap, 68% say they plan to deploy automation, and more than half say they are already hiring for AI-related roles that didn’t exist a year ago.

Barriers and Budget Pressures

The findings come amid rising demand for clarity on AI’s business case. While many CEOs still grapple with fragmented systems and uneven returns, the momentum around AI is strong, underpinned by clear intentions to scale and a growing willingness to rethink traditional leadership structures.