With eye on transformation, industry bets on 10-30% higher AI budget

Industry experts pointed out that there is a rising demand for professionals skilled in data science, machine learning, and AI systems development

In one of its most significant year-on-year expansions, Deloitte India, is increasing its artificial intelligence (AI) investments by nearly 30 per cent in FY26, according to a top executive at the multinational which is counted among the Big Four professional services firms. Others in the Big Four Club—KPMG, EY and PwC-- too are aggressively ramping up their core GenAI platforms and putting dedicated teams in place for AI needs. For their clients and also for themselves as AI comes with the promise to transform businesses.

 

In fact, about 70 per cent of companies taking part in Deloitte’s State of AI survey recently felt that GenAI would have the potential to transform their organisations in one to three years. 

 

“More than a third of our technology budget will be allocated to AI, covering employee reskilling, hardware and software procurement, R&D, and strategic alliances to build a robust AI-driven ecosystem,” said Nitin Kini, Chief Operating Officer of Deloitte South Asia. “With an ‘India for Global’ approach, a significant share of our AI investments is directed toward India, leveraging its strong tech ecosystem to develop scalable, globally deployable solutions,” Kini said.

 

Industry numbers tell a story. According to industry sources, while the IT industry is growing at less than 5 per cent, the deals in the AI space are witnessing a much higher growth of over 30 per cent. A recent Nasscom report shows that 63 per cent of Indian tech leaders plan to allocate more than 10 per cent of their total technology budget to AI. 

 

Indian tech investors—including product and services firms—deployed approximately $730 million in AI between 2022 and 2023, with key bets in data analytics, digital content, and generative AI as deployed by Jio-Glance, Perfios-Karza, Infosys-BASE Life Sciences, according to BCG’s Managing Director & Partner, Sambhav Jain. 

 

Beyond IT 

It’s not just the IT sector which is tapping into the AI to reshape its business strategies and investments. 

 

FMCG-to- hotels major ITC group has accelerated the adoption of digital technologies including AI applications across different nodes of its businesses.

 

Its super app ITC-MAARS is helping farmers make better decisions. ITC is using AI through its Sixth Sense Marketing Command Centre and Consumer Data Hub to engage with consumers in real time for hyper-personalised brand communication and product development. The conglomerate’s Life Sciences and Technology Centre in Bengaluru is also crafting cutting edge R&D solutions for its products. 

 

A company spokesperson said that ITC will continue to invest in digital technologies including AI to drive efficiency of operations. “Our next-generation smart digital architecture Mission DigiArc is aimed at mainstreaming a digital-first culture to create new sources of competitive advantage and drive efficiency,” the company spokesperson said. 

 

Moving to a very different business, Tata Steel has built over 550 AI models for enhancing yield, energy, throughput, quality and productivity, stakeholder experience, safety, and sustainability over the last five to six years. The company said that it has invested significantly in cutting-edge generative AI platforms which are now powering automated insights, conversational interfaces, and addressing hard-to-solve use cases by combining the abilities of conventional (mathematical) AI with the creative capacities of Generative AI. 

 

Hiring impact

 

PwC’s 28th Annual CEO Survey found that the impact of AI on jobs is more complex than the common fear of mass layoffs. While 10 per cent of Indian CEOs reported reducing headcount due to AI-driven efficiencies over the past year, nearly twice as many—20 per cent—expanded their workforce, adding new roles focused on AI and technology.

 

“Despite automation, businesses are not sidelining human capital. Instead, they are investing in upskilling programs to help employees transition into higher-value roles,” said Manpreet Singh Ahuja, Partner and Leader - TMT, PwC India. 

 

Industry experts pointed out that there is an increasing demand for professionals skilled in data science, machine learning, and AI systems development, driving job creation in these specialized fields.

 

“Our work may not be replaced by AI, but you may be replaced by another person who knows AI. Most of the projects that we do are not intended to reduce the wage bill. It's more to enhance efficiency,” said Saurabh Kumar, Partner - Engineering and AI, Deloitte India

 

Large scale job losses, however, consulting firms believe, is not what is on the cards. Rather, the bigger trend is toward job creation and workforce transformation.  “We continue to be on the lookout for high quality AI talent and expect net new hiring from the market especially at senior levels to drive client outcomes,” said Hari Balaji, Partner Technology Consulting, EY India.

 

Adoption of AI has also kicked off a discussion on ethics, privacy and responsibility around using such technology. KPMG, for instance, is building a Responsible AI team that includes data scientists, AI engineers, ethics and policy specialists, and security consultants.

 

“Many organisations are still in the early stages of AI governance, focusing on enterprise policies, model validation, and compliance frameworks. However, AI discussions are rapidly evolving with the rise of next-generation AI models, AI-powered enterprise software features, and shifting global regulations,”Akhilesh Tuteja, a Partner at KPMG India, said. 

 

The global AI market is projected to grow from $110-130 billion in 2023 to $320-380 billion by 2027, with AI services accounting for roughly 22-24 per cent of this spend. The India pie is just a small fraction of this. From about $6.3 billion AI market in India in 2024, the expectation is that it would reach $17 billion by 2027. 

Eye on AI

 

> Tech investors deployed approximately $730 mn in AI between 2022 and 2023

> Deloitte India increasing AI investments by nearly 30% in FY26

> KPMG, EY and PwC too are ramping up core GenAI platforms

> Nasscom report shows 63% of Indian tech leaders plan to allocate over 10% of technology budget to AI

> ITC using AI through Sixth Sense Marketing Command Centre and Consumer Data Hub to engage with consumers in real time

> Tata Steel has built over 550 AI models

> India’s AI market expected to reach $17 bn by 2027 from $6.3 billion in 2024