AI Adoption

Indian enterprises are increasingly recognizing the transformative potential of cloud technology in driving artificial intelligence (AI) adoption, according to the latest insights from EY’s Global Cloud Implementation Study. The report reveals that a significant 90% of Indian businesses believe their AI strategies would not have been possible without migrating to the cloud. This underscores the pivotal role cloud infrastructure plays in enabling scalable, data-driven solutions that are reshaping business operations across the country.

One of the standout findings of the study is the widespread shift toward hybrid cloud models among Indian companies. Around 67% of organizations are actively transitioning their applications to the cloud, reflecting a broader movement toward digital modernization. Furthermore, 80% of respondents said they now run enterprise applications in a hybrid environment—some on the cloud and others on-premises. This approach offers the dual benefits of flexibility and control, allowing companies to move critical workloads gradually while still exploring the full capabilities of cloud-native environments.

Beyond operational flexibility, the integration of AI and machine learning (ML) into cloud environments is unlocking new levels of innovation for Indian enterprises. The report highlights that 37% of companies view AI and ML as key enablers of product and service innovation, particularly after cloud migration. By leveraging cloud-native development, organizations can rapidly test, scale, and deploy AI models that enhance customer experiences, optimize supply chains, automate decision-making, and more.

Cloud-native development itself has emerged as a game-changer. When building applications directly on the cloud rather than migrating them from on-premise environments, businesses have reported greater innovation and efficiency. In fact, 37% of Indian companies cited innovation as the primary advantage of cloud-native development. This capability allows for faster iteration cycles, reduced time-to-market, and improved integration of advanced technologies like generative AI, predictive analytics, and natural language processing.

While innovation is the leading motivator, Indian organizations are also using cloud technologies to support environmental and regulatory goals. About 29% of surveyed enterprises indicated that improved monitoring of carbon emissions was a major benefit of moving to the cloud. As global environmental concerns mount, tools that help track, report, and reduce carbon footprints are becoming critical. Cloud-based solutions offer the agility and transparency needed to implement sustainable practices at scale.

However, the path to cloud transformation in India is not without challenges. Interestingly, only 25% of Indian businesses cited a lack of skills or capabilities as a significant barrier to cloud adoption, compared to 38% globally. This may suggest that India’s strong base of tech talent and growing investment in upskilling initiatives are helping companies overcome capability gaps. Instead, the biggest concerns for Indian enterprises are cybersecurity (24%) and budget constraints (29%). These issues highlight the need for robust, cost-effective security frameworks and strategic financial planning to support long-term digital initiatives.

Abhinav Johri, Technology Consulting Partner at EY India, emphasized the strategic shift underway across the Indian enterprise landscape. “The rapid adoption of cloud technology in India is more than just a technological upgrade—it’s a transformational shift,” he said. Johri added that by harnessing the power of cloud for AI, Indian businesses are not only responding to current market demands but also preparing themselves to lead in a highly competitive digital economy.

With 100% of respondents reporting that it’s now easier to demonstrate cloud ROI to top executives, cloud adoption is no longer viewed as a cost center but as a growth enabler. The ability to tie cloud investments directly to innovation outcomes, operational improvements, and customer satisfaction is helping business leaders make a stronger case for further digital acceleration. This shift in perspective is crucial for ensuring sustained executive support and investment in AI-led transformation.

In conclusion, the EY report paints a compelling picture of how Indian enterprises are leveraging cloud transformation to fuel AI adoption and innovation. From enhancing product offerings and operational efficiency to achieving sustainability goals and improving decision-making, the cloud has become the foundation of India’s digital future. As organizations continue to embrace hybrid models and cloud-native development, supported by a growing ecosystem of AI tools, India is well-positioned to emerge as a global leader in digital innovation and intelligent enterprise transformation.