Companies May Up GenAI Spending By Half This Year

Companies worldwide are expected to spend 50% more on adopting generative AI (GenAI) technologies in 2025 compared to last year, according to a report from an American technology research and IT advisory firm.

- Jas Bardia & Varun Sood

This, even as analysts and management are divided on how the technology's rise will impact India's $254-billion IT services industry.

Two years after the launch of ChatGPT ushered GenAI into everyday discussions, US-based Information Services Group (ISG) in a September 2024 report said it expects companies globally to spend 6.5% of their total tech spending on GenAI in 2025.

According to Connecticut-headquartered ISG, in 2024, the most use cases of GenAI were in customer service functions as part of chatbots and BPO (business process outsourcing). This year will be no different.

GenAI's prominence among the world's largest companies comes at a time when enterprises are also flagging the new technology as a risk. Last year, seven IT services firms, including Accenture Plc., Cognizant Technology Solutions Corp., and Capgemini SE, flagged the rise of AI and GenAI tools as a risk factor in their annual reports. There are contrasting views on whether the new technology would help the country's IT services industry or prove disruptive.