Dell study: 26% of Indian firms run AI in production, but data centres lag

Dell Technologies has published the India findings of its Modern Enterprise Readiness Study 2026, released last week in early October 2026. The study found that 26 per cent of Indian organisations now have well-established AI or generative AI systems running in production, up from 20 per cent a year earlier, a rise of about a third. Around 70 per cent of Indian organisations said AI is a top priority, but most said security worries and data centres that are not ready for AI workloads are holding them back.

For the past two years, most Indian companies have talked about AI in terms of pilots and proofs of concept. The jump from 20 to 26 per cent in production use shows that a growing group of firms has moved past experiments and is running AI in daily operations, such as customer service, document handling, forecasting and software development. That is the point at which digital transformation starts to change costs and revenue, not just presentations.

The same numbers also show how far most companies still have to go. Roughly three in four Indian organisations do not yet have mature AI in production, even though about seven in ten call it a priority. The study points to two main reasons for that gap. The first is risk: six in ten firms say security and compliance concerns have slowed or stopped their plans. Under India's data protection law, companies have to know where their data sits, who can see it and how AI systems use it, and many are not yet confident they can answer those questions.

The second reason is infrastructure. Two in three respondents said their data centres cannot yet handle AI at production scale. Running AI models needs more computing power, faster storage, better cooling and more electricity than ordinary business software. Firms must choose between upgrading their own facilities, renting capacity in the cloud, or mixing both, and each choice has cost and data-control trade-offs.

This helps explain the third finding: nearly nine in ten Indian organisations say they are shifting budgets towards a smaller set of partners that can supply hardware, software and services together. For India's IT services companies, system integrators and data centre operators, that points to steady demand for help with AI-ready infrastructure, security and governance. The findings should be read with care: the India sample is 150 respondents, and the study was commissioned by a company that sells AI servers and storage.

Short-term: Expect more spending by Indian firms on data centre upgrades, AI-ready servers, cloud capacity and security tools, as well as more consolidation of technology contracts with fewer, larger vendors.

Long-term: Companies that solve security and infrastructure gaps early are likely to turn AI into lasting cost and productivity gains, while those stuck at the pilot stage risk falling behind competitors that move faster.

Who is affected: Chief information officers and IT teams at Indian enterprises, mid-sized firms planning their first production AI systems, IT services and cloud providers, data centre operators, and employees whose daily work is being reshaped by AI tools.

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