Indian Companies Price-Sensitive When Adopting Generative AI Models: Report

In an era of rapid technological advancements, adopting artificial intelligence has become essential for companies to maintain a competitive edge. Over 95% of businesses feel pressure from external and internal stakeholders to adopt generative AI. Also, 89% expect the technology to transform their organisation within three years, according to Deloitte's State of Generative AI Report (India Perspective).

Indian participants are highly price-sensitive when adopting gen AI models, highlighting the challenge of balancing innovation with affordability in a price-sensitive market. Nearly 50% of Indian respondents cited pricing as the primary factor, followed by the model's overall performance and flexibility.

The report projects strong optimism about gen AI's transformative potential. Around 70% of businesses surveyed expect this transformation to occur within one to three years in their organisation. Meanwhile, 48% expect similar transformation across their industry, highlighting the growing urgency across sectors.

Despite progress in data management, strategy and tech infrastructure, where over 40% of respondents reported high levels of preparedness to adopt gen AI, there are considerable gaps. Only 25% of participants admitted to being highly prepared in the areas of risk, governance and talent.

Gen AI has improved productivity and efficiency, with 42% of respondents indicating this as the most important benefit their organisation has achieved through gen AI initiatives. This aligns with initial expectations of gen AI, where 61% cited improved efficiency and productivity as a key benefit desired. This is partially made possible with integration of gen AI into the organisation's functions and processes, which 34% indicated is the key action to drive value.

Investments in gen AI are on the rise, focusing on data management, cloud consumption and AI/machine learning capabilities, as per the report. However, less than 20% of the overall AI budget is currently dedicated to gen AI in over 50% of the organisations surveyed.

One of the primary roadblocks with gen AI is using sensitive data in models, with 68% of businesses indicating it as a significant concern. Other barriers include data privacy and security concerns, with 65% citing significant challenges. Firms with less AI expertise struggle with talent acquisition and skills development, while more experienced companies face implementation hurdles.

The survey was conducted between May and June 2024, with 200 business and technology leaders participating from India.