Indian CIOs to kickstart budget allocation for GenAI in 2025

Bengaluru: Indian chief investment officers (CIOs) are expected to start allocating budgets for Generative artificial intelligence (GenAI) from 2025, according to a  forecast put out by management consulting firm Gartner Inc on Tuesday. This would mark the maturing of GenAI projects from an experimental stage to a more committed investment. 

The new-age tech will largely be used for reducing costs and increasing productivity by 18 per cent in the near future. IT leaders expect that GenAI will replace 3.8 per cent of headcount in 2024, 6.1 per cent in 2025, and 8.2 per cent in 2026.

“Through 2028, AI specific expertise will demand a price premium of 5 per cent to 15 per cent over non-AI expertise, with the percentage varying across the different services markets,” added the report. 

Meanwhile, India’s IT spending is projected to total $160 billion in 2025, a marginal increase of 11.2 per cent against 10.3 per cent in 2024. In 2023, it was just 3.2 per cent. 

“Global services market remains characterised by macroeconomic conditions, concerning interest rate. Amidst this, we expect customers focusing on app modernisation, cloud and consulting services, especially in India,” said  Naveen Mishra, Vice President Analyst at Gartner. 

GenAI has been in focus for several companies, including IT services providers and is expected to be a bigger contributor at various levels of services for industries. While the likes of Wipro, Infosys have not disclosed the hiring breakup for GenAI, they have highlighted its rising demand in the past few quarters. 

Gartner’s IT spending forecast methodology relies on analysis of the sales by over a thousand vendors and the survey was conducted with 125 IT leaders, across industries.