Businesses worldwide are investing more in AI than ever before, yet many still struggle to translate that investment into large-scale success.
That’s according to the 2025 Kyndryl Readiness Report, which surveyed 3,700 senior executives across 21 countries. The study paints a mixed picture: while companies are seeing early returns from AI projects, many are still held back by outdated infrastructure, skill shortages, and regulatory pressures.
AI investments have jumped 33% on average since last year, with 68% saying they are investing heavily in at least one AI area. But despite the spending surge, many projects are still stuck in the pilot phase.
According to the report, 54% of organizations said they are now seeing positive returns on their AI investments — up 12 points from 2024 — yet 62% admitted they haven’t moved beyond experimentation.
“A readiness gap exists as enterprises grapple with the promise of transformative value from AI,” said Martin Schroeter, Chairman and CEO of Kyndryl, in the press release. “While 90% of organizations think they have the tools and processes to scale innovation, more than half are stalled by their tech stack, and less than a third say their employees are truly ready for AI. Closing that gap is the challenge and opportunity ahead.”
The report suggests that while companies are eager to harness AI, many lack the technical readiness and workforce capability to sustain progress.
People readiness emerges as the next frontier
The human factor has become one of the biggest challenges in scaling AI. Kyndryl’s research found that 87% of leaders believe AI will “completely transform jobs” in the next 12 months, but only 29% feel their employees are ready to take advantage of it.
This gap highlights what Kyndryl calls a “people readiness challenge,” the mismatch between technological ambition and workforce capability. Nearly half of CEOs also admitted that their organizations stifle innovation or move too slowly in decision-making.
The report identifies a group of companies labeled “Pacesetters” — those that are making faster progress by prioritizing culture, upskilling, and leadership alignment. These organizations are 32 points less likely to see their tech stack as a barrier and 20 points less likely to report cyber-related outages.
Cloud and geopolitics add new pressures
As AI grows more integrated with cloud infrastructure, new concerns are emerging around data regulation and sovereignty. Kyndryl found that three in four business leaders now worry about the geopolitical risks of storing and managing data globally.
As a result, 65% have already adjusted their cloud strategies, either by repatriating data, switching vendors, or shifting to private cloud setups. “With geopolitical and regulatory pressures intensifying, leaders are forced to rethink where and how their data is stored, processed, accessed and secured,” the report noted.
Nearly a third of executives cited regulatory or compliance issues as the main barrier to scaling technology investments.
Cybersecurity: The top AI use case
Despite the hurdles, organizations are still betting big on AI, especially in cybersecurity. The study found that three in four companies are now using AI to detect and respond to cyber threats, more than any other AI application area.
This isn’t surprising, given that 82% of businesses reported experiencing a cyber-related outage in the past year. To counter this, 42% of respondents said they’re upgrading IT infrastructure, while 39% are focused on strengthening cybersecurity measures.
Automation offers a glimpse of what’s possible
The report shows that organizations with high automation density experienced faster recovery times, fewer errors, and lower costs. In fact, 32% of surveyed companies said they reduced operational costs through automation and optimization over the past year.
Automation, Kyndryl notes, is becoming “an essential pillar of modern IT operations,” helping teams close visibility gaps and strengthen cyber resilience.
This year’s Kyndryl Readiness Report describes the moment as a “tipping point.” Organizations are pouring unprecedented amounts into AI, cloud, and automation, but many are discovering that scaling innovation requires more than money.
Enterprises now face a choice: strengthen their infrastructure, reskill their people, and modernize culture or risk being left behind as AI continues to reshape industries faster than ever before.
Staying on the theme of AI and money, medical AI startup OpenEvidence has raised $200 million in a funding round led by Google Ventures.