APAC leads with USD $11.3m average AI spend as global gap widens

New research from Rackspace Technology indicates global corporate investment in artificial intelligence (AI) has risen by 250% year-on-year, reaching USD $8.7 million on average, with Asia Pacific (APAC) spending highest at USD $11.3 million.

The study, which surveyed over 1,400 IT decision-makers including 269 in APAC, highlights a growing gap between early AI adopters - termed "AI Leaders" - and organisations still developing their approach. Only 13% of respondents were classified as AI Leaders, but these organisations are already experiencing notable outcomes from their AI initiatives.

Study findings

Of the AI Leaders, 64% reported substantial benefits from AI deployment, compared to 32% of other organisations.

The report found that these Leaders are three times more likely to have AI agents in production and to be effectively scaling their deployments compared to their peers.

AI Leaders are described as organisations that have embedded artificial intelligence into their core business strategies. They scored highly across several criteria including customer experience, new product development, and employee productivity. The research shows that 95% of AI Leaders have secured strategic alignment on AI within their company, and about 75% have undertaken comprehensive workforce training for the use of AI tools and solutions.

"While nearly every organisation is exploring how to implement AI, these forward-thinking companies are not waiting for the technology to mature—they have acted early, starting with achievable use cases to build momentum," said Srini Koushik, President of AI, Technology and Sustainability at Rackspace Technology. "By doing so, they have been able to test and refine their strategies, train their teams, and establish the governance and infrastructure needed for long-term success. Now, as others remain in the experimentation phase, these leaders are confidently scaling their initiatives and securing a lasting competitive advantage."

The report notes that overall AI investment is accelerating, with respondents anticipating further increases over the coming years. Specifically, 90% of APAC participants expect their organisations to boost AI spending in the next five years. Investment is currently split evenly between developing in-house AI solutions and integrating third-party products. The average number of AI projects in production is also forecasted to rise by 33% in 2025.

Additionally, 65% of APAC respondents anticipate a positive return on their AI investments within the next two years, with another 26% projecting returns within three to five years.

Adhil Badat, Managing Director for Asia Pacific and Japan at Rackspace Technology, commented: "Across APAC, we're seeing a surge in AI adoption as businesses shift from experimentation to execution."

"Organisations are no longer treating AI as a future bet, it's becoming a core part of their strategy today. From automating customer interactions to optimising supply chains, companies in the region are investing in AI to drive efficiency, unlock innovation, and stay competitive in a rapidly evolving market."

Shifting perceptions of AI

Survey results suggest companies are viewing AI as more than a simple automation tool.

A substantial 90% of respondents identified customer experience as a priority use case, with a parallel emphasis on boosting employee productivity. In APAC, customer experience was the most tracked key performance indicator (KPI) for AI initiatives at 51%, while revenue and profitability followed at 48%.

The findings also reveal that 24% of businesses are applying AI to enhance or develop new products.

Cybersecurity and AI

Cybersecurity remains a key consideration; it is identified as a top-three risk factor for AI but, in a shift from previous years, is increasingly seen as an area where AI can be used to strengthen defences. According to respondents, cybersecurity is the most transformative AI application projected for the next three to five years, closely followed by process optimisation.

AI Leaders address security challenges by embedding protocols and procedures into AI applications at the design stage.

Scaling challenges

Despite the surge in deployment, 72% of APAC organisations report ongoing challenges in scaling AI effectively.

Infrastructure investment is cited as critical, with 79% agreeing that bolstering infrastructure is necessary to enable scalable and flexible AI initiatives. The report also notes that meeting stricter data privacy and regulatory standards will be a substantial challenge over the next few years for the majority of respondents.

AI Leaders are more likely than others to favour hybrid cloud strategies for scaling their AI solutions, while other organisations utilise a mix of cloud deployment approaches.

Competitive advantage

The survey suggests that organisations in the AI Leaders category see artificial intelligence as more than an automation enabler - 87% consider it a fundamental competitive driver. The report highlights the wider gap developing between these leading organisations and others, with two-thirds of Leaders citing substantial benefits realised over the previous year.

According to the research conducted by Coleman Parkes Research on behalf of Rackspace Technology, the findings represent feedback from decision-makers across multiple sectors, ranging from manufacturing to healthcare and financial services, with company sizes spanning from 1,000 to over 10,000 employees and annual revenues from USD $50 million to USD $15 billion.