AI spending in India to reach $6 billion by 2027

The spending on Artificial Intelligence (AI) and Generative AI (GenAI) in India is projected to reach $6 billion by 2027, at a compound annual growth rate (CAGR) of 33.7 per cent, a report showed on Monday.

AI and GenAI adoption in the country has significantly increased, including software, services, and hardware for AI-centric systems, according to the International Data Corporation (IDC).

“India is the sleeping giant in Generative AI. Its scale, skills, and startups are set to transform not just AI in India but also in the world,” said Dr Christopher Marshall, VP of data, analytics, AI, sustainability and industry research, IDC Asia/Pacific.

According to Linus Lai, VP, Digital Business, IDC Asia/Pacific, 76 per cent of Indian enterprises are already focused on GenAI proof of concepts (POCs) or already have an investment plan in place.

“This AI Moment is not a one-hit-wonder. Its implications for India are widespread and strike at the heart of culture and business model transformation with data as its most valuable asset,” Lai noted.

Globally, the AI spending will exceed $512 billion by 2027, more than double its 2024 market size.

By 2025, 40 per cent of service engagements will include GenAI-enabled delivery, triggering a shift in human-delivered services for strategy, change, and training to prepare organisations for AI everywhere, said the report.