Asia Pacific companies are balancing AI ambition with ROI realities

Asia Pacific (ASPAC) companies are moving fast on AI to unlock higher-quality decision-making and seamless workflow automation, KPMG’s Q2 Asia Pulse finds.¹ Four in five say companies surveyed in the region say AI will remain a top investment priority over the next 12 months, even if a recession hits, illustrating how bullish companies are on AI.

This enthusiasm is backed by deep and growing strategic confidence. Eighty percent of ASPAC companies are confident of making their organizations’ AI trajectory future-ready, a 10 percent increase from three months ago. Moreover, 81 percent of ASPAC companies surveyed say AI is already delivering meaningful business value in the form of productivity gains, cost savings and revenue growth. This number stood at 69 percent three months ago. Within the region, India leads with 89 percent, and is followed by Australia at 86 percent.

While early benefits from AI implementation are visible, the survey shows a few barriers to adoption remain. More than half of ASPAC companies surveyed (55 percent, compared to 49 percent globally) have actively delayed or scaled back their AI agent rollouts because expected operational costs began outstripping generated value.

Most respondent ASPAC companies are still in the early part of their AI journeys. A quarter are in the strategic planning phase, while 26 percent are scaling the technology and are in the process of enterprise-wide adoption. Only 20 percent have so far successfully embedded AI into their day-to-day workflows and encouraged its consistent use across teams. A mere 5 percent have been able to establish ROI and show meaningful business outcomes from AI use. But this is likely to change fast.

Familiar risks such as those around data privacy and security (77 percent) and structural limitations around hiring or upskilling talent (72 percent) are the two biggest issues influencing ASPAC companies’ AI plans over the next six months. These are followed by other factors such as macroeconomic dynamics, the need to manage increased workload, and access to lower cost high-fidelity technologies are

One worry seems to be easing, however. Thirty-five percent of ASPAC companies surveyed say they will reevaluate their AI investment strategies given the total cost of AI ownership, down from 52 percent three months ago.

Companies are trying to manage their AI-related costs. About 80 percent of respondents in ASPAC say they have full or partial visibility of their operating costs related to AI systems. But wide differences exist across markets in the region: while 40 percent of Australian companies monitor AI costs fully and in real time, only 12 percent of companies in Korea do, for instance.

That notwithstanding, 70 percent of ASPAC companies plan to invest upwards of US$50 million in AI over the next 12 months, on things like training, technology, compliance and talent, compared with 64 percent globally.

Most of this spend is being allocated to the nuts and bolts of AI adoption still. This includes IT infrastructure (56 percent), cyber/ data security (49 percent), and operations and transformation (43 percent each).

For all the spending on technology and machines, the bigger story that emerges in this quarter’s AI pulse is the focus on people, with roles being redrawn and workflows reshaped. About three in four (73 percent) respondent companies in ASPAC are making quantifiable progress toward a fully integrated human-AI workforce.

The impacts of AI use are illustrative. About 8 in 10 (79 percent) regional companies say that employees using AI effectively are outperforming those who don’t. While 44 percent of Australian companies and 40 percent of Indian companies strongly agree with this view, while only 19 percent of Korean and 14 percent of Singaporean companies do.

ASPAC companies are confident in their current talent pipeline to meet the needs of their AI-enabled workforce. And this confidence has surged in ASPAC, from 70 percent last quarter to 86 percent in this (in line with global numbers).

However, a few challenges remain. More than 40 percent of respondent ASPAC companies are of the view that skills gaps are a major roadblock to demonstrating AI’s ROI. In response to this, and to ensure that the current workforce is equipped and skilled to benefit from AI, almost half (48 percent) of regional companies are redesigning organizational roles, reshaping workflows and upskilling/ reskilling current staff to ensure baseline AI fluency.

As AI adoption becomes more entrenched, ASPAC companies are shifting from basic generative tools to autonomous AI agents, focusing heavily on driving efficiency and net-new revenue growth. A third (34 percent) of them now focus their AI agent strategy on efficiency and net-new revenue.

ASPAC companies are increasingly deploying agentic AI systems into their workflows. In Q1, 16 percent of ASPAC companies surveyed were scaling AI agents and 10 percent were using multiple AI agents across workflows—those numbers have increased to 28 percent and 22 percent respectively. The agents are mainly concentrated in IT (60 percent), operations (47 percent) and marketing & sales (43 percent).

But here again, challenges remain in deploying AI agents. While 36 percent of ASPAC companies are struggling with AI cost and economic literary skills, 35 percent face the issue of technical skill gaps.

Nonetheless, ASPAC companies are continuing to advance with their AI strategy, ensuring to address and encourage AI and employee collaboration. More than 4 of 10 ASPAC companies are teaching prompt skills to maximize AI agent effectiveness, creating agent-specific sandbox environments, developing role-specific guidelines, and fostering a “partnership mindset” through workshops on human-AI agent collaboration.

About four in five (79 percent) ASPAC CEOs actively own AI as a strategic business priority, with clear accountability for outcomes. Boards also remain well-versed in AI topics, as the last Pulse showed.

Governance is catching up too. Seventy-four percent of ASPAC companies say they have the baseline capabilities to manage risk as AI scales, particularly in Australia (83 percent) and Singapore (80 percent).

The Pulse shows that the AI landscape in ASPAC continues to evolve. There is real progress, with the nuts and bolts falling into place.