India, 26 December 2023: CEOs globally recognize the potential of Artificial Intelligence (AI), but most are encountering significant challenges in formulating and operationalizing related strategies, according to the latest EY CEO Outlook Pulse 2023 survey.

The EY quarterly survey of Indian CEOs, which provides insights on AI, capital allocation and investment strategies, reflects the difficulties and the urgency that CEOs find themselves acting under when it comes to the emerging technology. While 84% of CEOs see the need to act quickly on generative AI (GenAI) to avoid giving their competitors a strategic advantage, a similar proportion (80%) also state that the uncertainty around this space, makes it challenging to act quickly.

Conscious of it’s potential to disrupt their own business models, a remarkable 100% of CEOs are making or planning significant investments in GenAI. To fund these investments, 84 % are raising new capital or re-allocating it from other investment projects or technology budgets. But investing in an AI-enabled future is easier said than done as more than half of CEO respondents (62%) say the rapid pace of GenAI progress and regulatory environment restrict their capital allocation decisions on GenAI initiatives. Over three-fourth (78%) also believe a surge in companies claiming to have AI expertise complicates decisions about identifying and implementing credible ecosystem partnerships and acquisition targets.

Mahesh Makhija, Partner and National Leader, Technology Consulting, EY India, said, "India stands at the forefront of the AI revolution, poised to harness the potential of Generative AI to transform industries and improve the lives of millions.

With a unique digital approach, a vast data advantage, and a thriving ecosystem of talent and innovation, India has the economic and political strength to set the agenda for this new technological era. Embracing an AI-first approach, businesses must build a robust foundation, focusing on platforms, people, and processes. However, for India to truly lead, strategic policy initiatives are crucial, necessitating increased government involvement, infrastructure support, data accessibility, and responsible AI governance. This is India's moment to shape the future of the AI-led Industrial Revolution."

Despite challenges, CEOs are investing in the future of the workforce to accelerate GenAI initiatives — a majority (86%) have either completed or are in the progress of hiring new talent with relevant GenAI skill sets. Many are also establishing pilots and partnerships with multiple companies.

CEOs and AI: A strong partnership ahead

In the current landscape, a significant 50% of organizations find themselves in the exploration or optimization phase of AI implementation, lacking a definitive AI leadership structure. Despite this, a compelling 82% of CEOs express confidence that the integration of generative AI will empower them to enhance their capabilities as effective leaders. This resounding belief reflects a widespread recognition of the transformative potential that generative AI holds for business leadership.

To read the full report, please visit: ey.com/CEOOutlook