Enterprises are making bigger bets on artificial intelligence (AI) than ever before. According to the latest BCG AI Radar survey, one in three companies worldwide plans to spend more than $25 million on AI in 2025, with many aiming even higher. GenAI, or generative AI, is at the centre of this surge.
KPMG’s Q1 2025 Pulse Survey shows that 68% of leaders expect to invest between $50 million and $250 million in GenAI over the next year, up sharply from 45% just a few months earlier. These numbers reveal that AI is no longer a side project. Instead, it has become a core part of business strategy and growth.
Shifting priorities and the ROI question
Because AI is now seen as a driver of competitive advantage, spending priorities have shifted. BCG finds that companies are focusing less on routine business operations and more on initiatives that promise strategic returns, such as advanced analytics, predictive AI, and modern AI infrastructure.
Besides that, cybersecurity and process automation are also attracting new funds, as firms seek to protect their data and streamline workflows. Most importantly, risk management and workforce readiness have become top concerns, with 82% of leaders naming risk as their biggest GenAI challenge for the rest of 2025, according to KPMG.
Despite this optimism, many executives remain cautious about returns. BCG’s global survey reveals that only a quarter of companies report meaningful value from their AI projects so far. Most still struggle to measure the financial impact, and only a third expect to track ROI within the next six months.
The gap between ambition and outcome is clear. However, leading companies are closing this gap by focusing their budgets on a small set of high-impact AI projects, scaling them quickly, and transforming core business processes. These leaders report more than double the ROI of their peers, showing that depth, not breadth, delivers results.
AI in finance: A standout story
The finance function offers a striking example of how AI investments are paying off. According to KPMG’s global AI in finance study, 71% of companies are now using AI in their finance operations, with 62% using it to a moderate or large degree. Adoption is highest in financial planning (78% piloting or using AI), accounting (76%), and treasury management (64%). Usage is also growing in research and data analysis (60%), predictive analysis and planning (55%), and fraud detection and prevention (54%).
Importantly, 92% of companies say their finance function’s AI initiatives are meeting or exceeding ROI expectations, and almost one-third plan to increase AI budgets or shift funds from other activities to drive further AI adoption. AI leaders, those with the most advanced and mature deployments, are more than twice as likely as beginners to report higher-than-expected returns. They achieve this by investing in digital processes, piloting new initiatives, and focusing on change management and education.
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Cloud technology remains the top priority for enhancing financial reporting, but non-generative AI has quickly risen to second place, with 61% of finance leaders now prioritising it for reporting improvements. As AI becomes more embedded, companies expect better data, faster insights, lower costs, and greater operational effectiveness.
Barriers that remain
Even as spending grows, challenges persist. KPMG reports that 85% of leaders cite data quality as the biggest anticipated challenge to AI strategies in 2025. Trust in AI outputs, data privacy, and cybersecurity are also high on the list, with 71% of leaders concerned about privacy and security, and 46% citing employee adoption as a major barrier.
Besides that, less than a third of companies have upskilled even a quarter of their workforce to use AI effectively, showing that talent and adoption remain major hurdles. Because of these obstacles, many firms are still in the early stages of scaling AI, and only a handful have fully embedded GenAI into their daily workflows.
What this means for India’s IT industry and CIOs
India’s technology sector is also raising its bets on AI. The BCG AI Radar survey includes India among the top markets where AI investment is accelerating, with one in three Indian companies planning to spend more than $25 million on AI in 2025.
This trend aligns with the Indian government’s push to make the country a global AI leader, as seen in the near-tripling of funding for the IndiaAI Mission in the Union Budget 2025. This funding will support new AI labs, deep-tech startups, and industry-led projects, with ₹500 crore set aside for AI Centres of Excellence focused on sectors like education, healthcare, and agriculture.
For Indian CIOs, these shifts signal both opportunity and responsibility. With domestic AI spending expected to cross $9 billion by 2028 (as per IDC InfoBrief), IT leaders must make smart choices about where to invest. Most importantly, they should focus on building strong data foundations, upskilling their teams, and choosing projects that deliver real business value.
Because the government is supporting AI innovation and digital infrastructure, Indian firms are well-placed to become global AI partners. However, success will depend on how quickly they can move from pilots to large-scale adoption, and how well they can measure and communicate the returns on these investments.
Why smarter budgeting matters
For every technology leader, understanding where the money goes is more important than ever. Smart allocation of AI budgets is not just about following a trend. It is about building real competitive advantage. By focusing on the areas that drive the most value and tracking results closely, leaders can ensure their AI investments pay off. Therefore, as budgets continue to climb, the winners will be those who combine bold spending with disciplined execution and a clear focus on results.
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