Majority of Organizations See Positive Returns on AI Investments, 62% Yet to Go Beyond Pilot Projects: Kyndryl Report Businesses report AI momentum but foundational gaps in tech and talent will now define the next phase of growth and progress

54 per cent of organizations reported seeing positive returns on their artificial intelligence (AI) investments, an increase of 12 points from 2024 but 62 per cent still haven't advanced their AI projects beyond the pilot stage, according to the latest Kyndryl Readiness Report, drawing on responses from 3,700 senior leaders across 21 countries including India.

The data reveals an instance of momentum and reflection – as businesses report growing returns from AI investments while facing mounting pressure to modernize infrastructure, scale innovation efforts, reskill workforces and manage risk in an increasingly fragmented regulatory landscape.

"A readiness gap exists as enterprises grapple with the promise of transformative value from AI," said Martin Schroeter, Chairman and CEO of Kyndryl. "While 90 per cent of organizations think they have the tools and processes to scale innovation, more than half are stalled by their tech stack, and less than a third say their employees are truly ready for AI. Closing that gap is the challenge and opportunity ahead."

Last year's report revealed a critical gap between perception and preparedness: while 90 per cent of business leaders believed their IT infrastructure was best in class, only 39 per cent felt it was ready for future disruption. While there has been momentum – that tension remains.

This year confidence continues to outweigh capability. While 90 per cent say their tools and processes allow them to rapidly test and scale new ideas, more than half say their foundational technology stack holds back innovation. 87 per cent of the respondents said AI will "completely" transform jobs at their organizations within 12 months, even though many say their employees are not using AI frequently today and few have the technical skills necessary.

While reporting clear benefits from cloud adoption, organizations are now reevaluating where and how their data is stored, processed, accessed and secured amid an increasingly fragmented regulatory landscape. Businesses are also balancing legacy infrastructure challenges, with 70 per cent of CEOs saying they reached their cloud setup "by accident rather than design."

Business leaders across all industries and countries said their company's AI spending jumped 33 per cent on average since last year, with 68 per cent investing "heavily" in at least one form of AI. As AI investments rise, so does the pressure to show value – and protect it. Three in five leaders say they feel more pressure this year to deliver ROI from AI than last. Three in four organizations are investing in AI for cybersecurity, more than any other AI capability.

Many organizations are also revisiting their cloud infrastructure, prompted by new global regulations and growing concerns about data sovereignty. Three in four leaders report concerns about the geopolitical risks associated with storing and managing data in global cloud environments, and 65 per cent have adjusted their cloud strategies in response – by investing in data repatriation, reassessing vendors, and shifting toward private cloud models.

As leaders look to scale innovation, people readiness is emerging as a key barrier – and a key opportunity. While nearly 9 in 10 believe AI will completely reshape jobs in the next year, only 29 per cent feel their workforce is ready to successfully leverage the technology and concerns remain around the skills needed to succeed in this era.