TLDR: A new report from Lenovo and IDC projects that Generative AI (GenAI) will account for a significant 43% of India’s total AI expenditure by 2025. While India’s overall AI investment is set to grow 2.7 times, adoption remains in early stages, with a strong focus on governance, risk, and compliance (GRC) and a preference for hybrid infrastructure.
India is on the cusp of a significant artificial intelligence (AI) transformation, with Generative AI (GenAI) leading the charge. According to the latest edition of the Lenovo CIO Playbook 2025, titled ‘It’s Time for AI-nomics,’ GenAI is projected to command a remarkable 43% of India’s total AI spending by the year 2025. This comprehensive study, based on global IDC research encompassing over 2,900 respondents, including more than 900 IT and business decision-makers from 12 Asia Pacific (APAC) markets, highlights a robust investment appetite alongside cautious adoption.
Overall, India’s AI spending is forecasted to surge by 2.7 times between now and 2025. Despite this ambitious growth trajectory, AI adoption in India is still in its nascent stages. Approximately 49% of Indian organizations are currently evaluating or planning AI initiatives within the next 12 months. This figure aligns with the global average but slightly trails the APAC regional average of 56%, indicating a measured approach to AI integration.
A pivotal shift in business priorities is evident, with Governance, Risk, and Compliance (GRC) emerging as the top concern for APAC CIOs heading into 2025, having jumped 12 spots. Sumir Bhatia, President, Asia Pacific Infrastructure Solutions Group, Lenovo, emphasized this, stating, “For 2025, governance, risk, and compliance have jumped 12 spots to become the top priority, highlighting the focus on secure and responsible AI.” However, there’s a noticeable implementation gap, as only 19% of Indian CIOs report having fully developed AI governance frameworks. Ethical concerns, the potential for algorithmic bias, and data privacy challenges remain significant barriers to widespread adoption.
Return on Investment (ROI) stands out as a primary challenge for Indian organizations, which expect a substantial 3.6x return on their AI investments. This expectation necessitates a more strategic and outcome-led deployment approach. Other common hurdles include data quality issues, a shortage of internal AI expertise, and high infrastructure costs.
In terms of infrastructure, a clear preference for secure and low-latency environments is observed. Around 63% of Indian companies favor hybrid and on-premise AI infrastructure over public cloud solutions for their AI workloads. Amit Luthra, Managing Director, Lenovo ISG India, noted, “Hybrid architectures offer the best of both worlds — scalability and control.”
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GenAI’s transformative potential is being recognized across various use cases. In India, sales leads as the top function benefiting from AI, followed closely by marketing and software development. Beyond GenAI, AI-powered PCs are also gaining traction, with 43% of organizations in APAC reporting significant productivity gains, and 53% of Indian organizations actively planning for their adoption.
