Indian companies are investing in artificial intelligence (AI) for the long term, with a growing interest in using open-source tools to drive return on investment (ROI) and innovation, according to a research commissioned by IBM.

The study revealed that 87% of Indian respondents report making significant progress in executing their 2024 AI strategy, with 76% already seeing positive ROI from their AI investments. In addition, Indian companies are experimenting with AI to find new uses cases as 89% of those surveyed said that their companies have started more than 10 pilots in 2024.

93% of Indian respondents indicate they will increase their AI investments in 2025, while 71% are planning to leverage open-source ecosystems to optimise their AI implementations, the survey shows. The data also confirms that having the right tools and strategy in place for responsible AI will be key to scaling its implementation in 2025 as governance becomes the top concern for those surveyed from India.

“India is rapidly embracing AI with a clear focus on driving innovation and ROI. The growing use of open-source AI tools is crucial for improving productivity and financial returns. However, it's clear that this technology needs to be leveraged responsibly if we are to scale its use,” says Sandip Patel, Managing Director, IBM India & South Asia. “At IBM, we're committed to empowering businesses with solutions across the full AI stack to capitalize on the AI opportunity, with an approach based on transparency, trust and choice,” he adds.

97% of surveyed Indian organizations are planning to either increase or maintain their investment in AI in 2025, the study says. Surveyed Indian companies are focusing on specific areas for allocating their AI investments in 2025, particularly IT operations (83%), software coding (56%) and data quality management (55%).

When asked what strategic changes will be made in 2025, surveyed IT decision makers identify utilizing open source (71%), managed cloud services (70%), and hiring specialized talent (66%) among the most common ways they plan to optimize their AI investments.

Companies face a broad range of challenges as they implement AI, top of which is the need for robust governance highlighting the need for responsible AI. The top five barriers are lack of AI governance (53%), lack of AI expertise (51%), technology integration (51%), data management (41%) and failure to deliver business value (39%).

Open source is becoming crucial to companies’ AI strategies. 48% of companies in India said that more than half of the AI solutions they are using are based on open-source.  As company size increases, so does the likelihood that the majority of AI solutions are based on open source, the study reveals.