Hyderabad Organisations in the country are grappling with a key question in the era of artificial intelligence – to invest in generative AI (GenAI) or not. Deloitte’s latest ‘State of Generative AI Report’ reveals a stark divide, with nearly 50 per cent of the companies in the country prioritising price over performance when considering GenAI adoption, while the other 50 per cent weighing the benefits over the costs involved in the adoption.

This contrasts sharply with global counterparts, who were ready to embrace GenerativeAI, placing a premium on overall performance, trust, and flexibility, with pricing a secondary concern.

Despite this hesitation, Indian businesses are acutely aware of GenAI’s transformative potential. Almost 90 per cent of respondents believe it will reshape their organisations within three years, with 70 per cent expecting this change within one to three years. However, this optimism is tempered by the reality of limited AI budgets. For over 50 per cent of organisations, GenAI accounts for less than 20 per cent of overall AI expenditure.

The report, which surveyed 200 business and technology leaders in the country who were among 2,770 global respondents, underscores the challenges of balancing innovation with affordability in a price-sensitive market like India.

“Generative AI has the potential to redefine the future of work by unlocking unprecedented efficiencies, productivity and innovation across industries,” S. Anjani Kumar, Partner, Deloitte India, said.

“However, to fully harness its transformative power, CEOs and senior leaders must prioritise its adoption and address the inherent challenges head-on. This means moving beyond surface-level understanding and tackling obstacles such as implementation complexities, investment, risk management and talent gaps,” he said.

Deloitte’s report highlights a clear internal conflict. Indian businesses feel the pressure to adopt GenAI, driven by both internal and external stakeholders, yet they are also cautious about the costs involved. This is further complicated by concerns around data privacy, security, and the need for skilled talent.

“Over 95 per cent of businesses surveyed feel pressure from external and internal stakeholders to adopt GenAI,” the report said.

While the report paints a picture of a market in flux, it also points to a growing sense of urgency. As global competitors forge ahead with GenAI, Indian businesses risk being left behind. The challenge, therefore, lies in finding a way to harness the power of GenAI in a way that is both cost-effective and aligned with the unique needs of the Indian market. 

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