Technology

India poised for major growth in generative AI investment by 2025

Sunday, 27 April 2025 12:05AM UTC

India’s AI expenditure is set to nearly triple by 2025, with generative AI expected to account for 43% of spending. As enterprises prioritise governance, hybrid infrastructure, and expert services, the country aims for responsible and outcome-driven AI adoption.

India is rapidly advancing its adoption of artificial intelligence (AI), with generative AI (GenAI) anticipated to make up a significant portion of total AI investment in the coming years. A recent study by Lenovo in collaboration with IDC highlights that GenAI is expected to account for 43% of India’s AI expenditure by 2025, reflecting a major shift in how AI technologies are being integrated across the country’s industries.

The study reveals that India’s AI spending is projected to increase by nearly 2.7 times between now and 2025, underscoring a robust investment environment. Despite this growth, the pace of adoption in India is somewhat cautious when compared with the wider Asia Pacific region. Currently, 49% of Indian organisations are either evaluating or planning AI initiatives within the next year, slightly below the regional average of 56%. This suggests that while interest in AI is strong, many organisations are still in the early phases of maturity with respect to deployment.

A key driver behind the surge in AI investment is the rising prominence of generative AI. This technology, which includes capabilities such as automated content creation and code development, is forecast to dominate AI spending. Indian enterprises have set ambitious expectations, aiming for a 3.6-fold return on their AI investments, prompting a focus on carefully planned, outcomes-oriented deployments.

Alongside investment considerations, the study emphasises the critical importance of Governance, Risk, and Compliance (GRC) in AI adoption. GRC has jumped to the top priority list for Chief Information Officers (CIOs) within the Asia Pacific region heading into 2025, with Indian companies recognising the need for robust frameworks. However, only 19% of Indian CIOs currently report having fully developed AI governance structures in place. Concerns related to ethics, algorithmic bias, and data privacy continue to pose challenges. Sumir Bhatia, President of Lenovo’s Infrastructure Solutions Group for Asia Pacific, stated, “Secure and responsible AI is now non-negotiable,” highlighting the heightened focus on trustworthy AI use.

When examining use cases, Indian companies are prioritising AI applications that drive revenue, notably in sales, followed by marketing and software development. This contrasts somewhat with broader Asia Pacific trends, where AI is often leveraged more extensively for IT operations, cybersecurity, and software development. The commercial orientation of AI in India signals the country’s emphasis on enhancing customer engagement and business growth through AI technologies.

Infrastructure preferences among Indian organisations also reflect a strategic balancing act. Approximately 63% favour hybrid or on-premise AI deployments, closely mirroring the global average of 65%. Speaking on this, Amit Luthra, Managing Director of Lenovo ISG India, commented, “Hybrid architectures offer the best of both worlds—scalability and control.” Indian firms appear reluctant to sacrifice compliance, data sovereignty, and latency considerations that come with cloud-only models, particularly when handling sensitive AI workloads.

The adoption of AI-powered devices is another important development. In the Asia Pacific region, 43% of organisations have noted productivity improvements from early use of AI-integrated personal computers (PCs). In India, more than half of organisations surveyed plan to adopt AI-enhanced PCs, recognising their role in enabling faster decision-making and operational efficiencies.

Talent shortages are also shaping the AI landscape in India. The study shows that 29% of Indian CIOs currently engage professional AI services, with a further 54% intending to do so. This reliance on external expertise aims to bridge the gap in internal skills, supporting outcome-focused AI execution. Fan Ho, Executive Director at Lenovo’s Solutions and Services Group Asia Pacific, stated, “Professional AI services are essential to transform ambition into execution.”

The Lenovo and IDC study suggests that India’s ongoing digital transformation through AI depends not only on increasing adoption but on building responsible, secure, and scalable AI systems. As the country accelerates its AI investments, leaders are prioritising governance, testing hybrid infrastructure models, and seeking expert support to meet ambitious goals.

This comprehensive assessment provides insight into how India is shaping the future of AI adoption amid challenges and opportunities, with a clear focus on measured, pragmatic growth within the burgeoning AI economy.

Source: Noah Wire Services

More on this

https://www.bwmarketingworld.com/article/genai-to-drive-43-of-ai-spend-in-india-by-2025-report-554904-554955 - This source corroborates the claim that generative AI (GenAI) is expected to account for 43% of India’s AI expenditure by 2025 and that AI spending in India is projected to increase by nearly 2.7 times, reflecting cautious but growing adoption among Indian organizations.
https://www.idc.com/getdoc.jsp?containerId=prAP53217325 - This IDC report confirms the prediction that AI spending in India will grow at a rate significantly faster than overall digital technology spending, supporting the article’s projection of robust investment growth in India’s AI market.
https://www.bwmarketingworld.com/article/genai-to-drive-43-of-ai-spend-in-india-by-2025-report-554904-554955 - The article also highlights that only 19% of Indian CIOs have fully implemented AI governance, risk, and compliance (GRC) policies, and cites concerns around ethics, bias, and data privacy, aligning with the study’s emphasis on the importance of governance and compliance frameworks.
https://indianexpress.com/article/trending/top-10-listing/top-10-countries-by-total-ai-investment-2025-where-does-india-rank-globally-9962276/ - This Indian Express article offers broader context on India's position in global AI investment rankings, supporting claims about the scale and pace of India’s AI investments relative to other countries and regions.
https://aimresearch.co/product/ai-startup-funding-report-india-2025 - The AIM Research report documents the growing ecosystem of AI startups in India and the increased investor confidence in AI-driven solutions, which indirectly supports the article’s points about rising AI adoption and the growing importance of professional AI services to address talent shortages.
https://carnegieendowment.org/research/2025/02/the-missing-pieces-in-indias-ai-puzzle-talent-data-and-randd?lang=en - This research paper highlights challenges in India’s AI landscape including talent shortages and the need for stronger R&D and governance frameworks, reinforcing the article’s discussion on the critical role of governance, risk, and compliance as well as external professional services for successful AI adoption.
https://news.google.com/rss/articles/CBMihgFBVV95cUxNNWgzQjBlX1pXdS0yd21qOGxRbWZwR1EyQ0tUMWJnTEVXQnljbjJKREpEMFdQbml6aEY5b1JZOUZuWHlqeV9CVnZieWQ5OU1VRzRNUi1teV9CSVJLQ2dHT2lDMWF1c2Yyb3JfMUVIZ1FwWFI2TEpIcHByRy1kWlQ4Zm4zNXpIUQ?oc=5&hl=en-US&gl=US&ceid=US:en - Please view link - unable to able to access data

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 8

Notes: The narrative references recent studies and forecasts up to 2025, indicating a focus on current trends and future projections. However, it lacks specific dates for the study or recent events.

Quotes check

Score: 7

Notes: Quotes from Sumir Bhatia and Amit Luthra are included, but their original source or publication date could not be verified. Their context aligns with industry concerns and strategies.

Source reliability

Score: 6

Notes: The narrative originates from a reputable context involving Lenovo and IDC, known entities in technology, but the specific publication source isn't stated.

Plausability check

Score: 8

Notes: Claims about India's AI investment growth and emphasis on governance are plausible given the technology sector's trends and challenges related to AI ethics and data privacy.

Overall assessment

Verdict (FAIL, OPEN, PASS): OPEN

Confidence (LOW, MEDIUM, HIGH): MEDIUM

Summary: While the narrative is generally plausible and focused on recent trends, it lacks specific source dates, and quotes could not be traced back to their earliest publication. The overall reliability is moderate due to known collaborators in the tech industry.

Artificial Intelligence
Generative AI
India technology
AI investment
Digital transformation