Indian companies to spend over $5 billion in AI technologies by 2027: All key details
A study by a leading analyst firm highlights the rapid expansion of India's artificial intelligence (AI) sector, driven by growing talent and investment in the AI ecosystem. The AI software market is projected to reach $2.6 billion by 2027.
AI infrastructure spending is expected to reach $733 million by 2027, placing India at the forefront of AI adoption. The country benefits from strong support systems, including a significant startup ecosystem and a large pool of talent. The IDC study identifies India as an AI Practitioner, indicating its progress on the AI maturity scale.
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Indian enterprises are recognising the transformative potential of AI, with enterprise spending on AI predicted to grow the fastest among surveyed markets. The focus is on improving employee productivity and enhancing customer experiences through AI-driven applications. However, despite the broad adoption of AI/ML technologies in large organisations, only 6 percent see AI adoption as central to their competitiveness, highlighting challenges in deployment and change management.
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India is set to become a global AI leader, with AI spending projected to grow at a Compound Annual Growth Rate (CAGR) of 31.5 percent from 2023, reaching $5.1 billion by 2027. With 20 percent of the world's data and AI talent, India's strong developer community and skill penetration are expected to position it ahead of the US in AI leadership.
Investments in AI infrastructure in 2024 and 2025 will support high-value use cases with significant future impacts. Key sectors driving AI spending include Banking, Financial Services, and Insurance (BFSI) and manufacturing, especially electronics and consumer goods, which are crucial to India's economic growth.
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