A new “APAC AI Outlook 2025,” commissioned by IBM, reveals that Indian enterprises are moving beyond AI experimentation to maximise the impact of their AI investments. Many of those surveyed from India expect AI to deliver longer-term benefits for their business in areas such as innovation (26%), revenue generation (21%), cost saving (12%) and increased employee productivity (12%). The game changer lies in developing cost-effective AI solutions, with the flexibility to use custom-built open-source models and seamless integrations between multiple vendors.
The pursuit of short-term wins during the initial phase of generative AI projects has given way to a more nuanced understanding of AI’s potential. The focus is also shifting from low-risk, non-core use cases, to deploying Gen AI in core business functions for competitive advantage and improved ROI. According to the Outlook, conducted by Ecosystm on behalf of IBM, nearly 60% of surveyed organisations across the Asia-Pacific region anticipate realising the benefits of their AI investments within two to five years. Only 11% expect returns within the next two years.
In 2025, the primary focus of AI investments for Indian organizations will center on enhancing customer experience (27%), planning and strategy (16%) and optimization of IT functions (16%). To realize these goals, organizations must address key challenges, including data accessibility issues (46%), limited AI skills (42%) and difficulty in integration and scaling (38%).
“In 2025, AI is set to be the game-changer for Indian enterprises, revolutionizing productivity and enabling unprecedented scalability,” said Sandip Patel, Managing Director, IBM India & South Asia. “As we work towards the vision of a Viksit Bharat, the focus will be on leveraging AI responsibly to drive real business value—moving beyond low-risk experiments to strategic initiatives that provide a competitive edge and improved ROI. Additionally, the rise of small, high-performing AI models will redefine efficiency, delivering task-specific results that rival larger models at a fraction of the cost,” he added.
APAC AI Outlook 2025 discusses the key trends and barriers organisations must overcome to unlock AI’s transformative potential, along with insights from 17 APAC industry leaders pioneering AI best practices. As such, it offers a valuable blueprint for organisations looking to accelerate their AI initiatives while managing challenges and risks.
The five strategic trends shaping the region’s AI future identified in the Outlook includes:
- AI-led revenue generation takes centre stage: Organisations will adopt a “Strategic AI” approach in 2025, prioritising projects based on feasibility and business impact. This reflects maturing recognition that early wins to build trust and organisational buy-in must be balanced with longer-term AI strategies. The challenge is how to scale AI through use cases that maximise revenue opportunities and ROI.
- Smaller specialised open-source models emerge as a powerful alternative for many AI applications: Purpose-built models will be in demand, including those designed for local languages, nuanced regional contexts and simpler computational tasks. The “Rightsizing AI” models require significantly less training data and generate a smaller carbon footprint than the large language models that have so far dominated AI discussions.
- Enterprises embrace new tools for visibility, governance and seamless AI integration: Asia-Pacific organisations will increasingly leverage open-source AI models to drive innovation and efficiency. The “Unified AI” with robust orchestration tools will streamline the management around these solutions, offering flexibility, cost-effectiveness, improved security and seamless integrations between different vendors.
- AI agents redefine the future of work: Enterprises will increasingly devise agentic workflows, powered by AI agents, to autonomously execute tasks, collaborate with human workers and drive value across the business. The “Agentic AI”, combining AI with automation. has the potential to achieve significant gains in operational efficiency, customer experience and decision-making. However, organisations need to establish internal guardrails, and regularly evaluate underlying models to ensure ethical and responsible use.
- Human-centred innovation drives the next phase of AI: While productivity tools have been a major focus of AI adoption, the future lies in leveraging AI to enhance human experiences and capabilities. “The Human-Centric AI approach” will become a powerful tool for employees to augment their roles, automate routine tasks, and unlock new opportunities for creativity and innovation. By prioritising the empathetic design of AI solutions, organisations can also foster stronger customer relationships and brand loyalty.
