Investment in artificial intelligence (AI) is growing at a galloping pace in India Inc, and while companies are willing to expand their budgets to boost productivity, improve customer efficiency and create a workplace that has humans and bots, boards and promoters are keeping a hawk's eye on the return on investment (ROI), and the risks involved in deploying the technology. Companies are playing the long game on AI, but boards want to know if the investment case is stacking up.
Risks from AI include hallucinations, incorrect interpretations, data and privacy breaches, factors that keep institutions on their toes even as the technology's use gains ground rapidly.
Companies across sectors—from IT to banking to traditional manufacturing industries—are bringing in AI heads, creating teams with its domain specialists and investing millions in upskilling their workforce. So far, the stakeholders are being patient, knowing that the deliverables will take at least a few years to take shape.
"In the early stages, investments always run ahead of measurable returns. Boards naturally ask where the ROI is, but perhaps the better question is whether the organization is building capabilities that will create a competitive advantage over the next few years," said Harsh Goenka, chairman of RPG Enterprises that has diverse businesses—from tyres to IT.
Goenka said companies expecting "instant financial gains" may be in for disappointment. "The returns from AI are unlikely to come from one big breakthrough. They will come from hundreds of small improvements like better productivity, faster decision-making, lower costs, improved customer experience and the ability to innovate at scale," he said.
The questions on investment come at a time when, in a bid to upskill employees, many have rolled out AI tokens that are similar to credits and involve usage of tools such as ChatGPT, NotebookLM or Claude; and for every token used, there is a cost. According to consultants advising firms, many are contemplating how much access employees should have to these AI tools so that their usage can be measured.
On Monday, Mint reported on IT services firms facing financial pressure due to ‘tokenmaxing’, or excessive AI token consumption, first flagged by them in January. This is making them aggressively track AI operational costs, which threaten to eat up enterprise tech budgets and drag revenue growth.
"Companies are making leeway for some wastage, as there will be some experiments on tools and due to unbridled usage of tokens. The return on investments may not be immediately visible, but boards are definitely asking what the opportunities and risks of AI are," noted Shriram Subramanian, the managing director of proxy advisory firm InGovern. In fact, AI, like all other technologies, is part of the annual budgets given to the chief technology officer or the chief financial officer, he said. “At the end of the fiscal year, the investments and their returns are reviewed.”
According to an article by consulting firm Boston Consulting Group—‘As AI Investments Surge, CEOs Take the Lead’—chief executives plan to devote more money to AI in 2026. Corporations expect to double their spending on AI in 2026, from 0.8% to about 1.7% of revenues. The article, published on the firm's website early this year, said four out of five CEOs are "more optimistic" about the ROI of their AI investments than they were a year ago.
"While boards are closely monitoring AI investments and will increasingly seek measurable returns, the current priority for many businesses is understanding where AI can create the greatest impact—for their operations, workforce, and clients. The focus today is on building the right foundations that will drive long-term value and competitive differentiation," said Vivek Prasad, partner and chief commercial officer at PwC India.
Enterprise boost
The heightened boardroom focus has not slowed enterprise adoption. If anything, global AI companies say Indian businesses are buying more enterprise licences.
Big Tech companies are increasingly focusing on enterprises, which they believe are ramping up their AI deployment across the world. The takers for enterprise solutions are higher.
Dave Citron, corporate vice-president at Microsoft AI, told Mint that the company is seeing enterprise demand scale up "across critical sectors".
"Our partnership with global healthcare firm Mayo is one example of how we're building AI, as enterprises increasingly deploy AI across various facets. We are looking at building Copilot into an AI super-app, which benefits all consumers and enterprises alike," Citron said. Copilot is a popular tool from Microsoft's stable.
Abhi Muchhal, product lead for international growth at AI research firm OpenAI, concurred, adding that the company has already signed "enterprise relationships in India with the likes of Infosys, Tata Consultancy Services, Razorpay and others." "We deeply care about these enterprise relationships. India is one of OpenAI's top five global markets for enterprises. What we're seeing now is that a lot of small consumer groups and employee teams use our tools, and they want to increasingly build their relationships with us. To anticipate this growth, we've now built a strong sales team for enterprises in India."
Muchhal said while the company's enterprise presence was largely led by adoption of ChatGPT, enterprise leaders have now started acquiring licences of the company's AI platforms. "This, in fact, is one of our biggest strengths in the India market on the enterprise side," he said.