Kyndryl Report Reveals AI Returns Amid Infrastructure Gaps

Kyndryl has released its second annual Readiness Report, surveying 3,700 senior leaders across 21 countries to assess how enterprises are managing AI adoption, infrastructure modernisation and workforce transformation.

The report identifies a pattern where confidence in existing capabilities exceeds actual readiness. Martin Schroeter, Chairman and CEO of Kyndryl, says: “A readiness gap exists as enterprises grapple with the promise of transformative value from AI.

“While 90% of organisations 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.”

Kyndryl findings show AI investments increase 33% year-on-year

Business leaders report their companies increased AI spending by 33% on average since 2024, with 68% investing in at least one form of AI. The survey shows 54% of organisations now report positive returns on AI investments, representing an increase of 12 percentage points from 2024. However, 62% have not moved their AI projects beyond the pilot stage.

The research indicates that three in five leaders feel increased pressure this year to deliver ROI from AI compared to last year. Cybersecurity emerges as the primary use case for AI implementation across the surveyed organisations.

The gap between perception and capability persists from Kyndryl’s 2024 findings. Last year, 90% of business leaders considered their IT infrastructure best-in-class, whilst only 39% believed it was prepared for future disruption. This year’s data shows 90% say their tools and processes enable them to test and scale new ideas rapidly, yet more than half identify their technology stack as an obstacle to innovation.

Cloud strategies shift as geopolitical and regulatory pressures mount

Organisations are re-examining their cloud infrastructure in response to regulatory developments and data sovereignty concerns. Three in four leaders express concern about geopolitical risks associated with storing and managing data in global cloud environments. In response, 65% have modified their cloud strategies through data repatriation investments, vendor reassessment and movement towards private cloud models.

The report reveals that 70% of CEOs describe their current cloud setup as resulting from “accident rather than design”, pointing to ongoing challenges with infrastructure inherited from earlier decisions. Organisations report benefits from cloud adoption whilst simultaneously navigating this fragmented regulatory landscape.

Workforce readiness emerges as barrier to AI scaling at Kyndryl surveyed firms

The survey shows 87% of leaders believe AI will transform jobs at their organisations within 12 months, yet only 29% consider their workforce ready to use the technology effectively. Organisations report that employees are not using AI frequently at present and few possess the technical skills required.

Cultural obstacles are also compounding the skills gap, with nearly half of CEOs report their organisation stifles innovation (48%) and makes decisions too slowly (45%). The report identifies a group termed “Pacesetters” who demonstrate different patterns in prioritising culture, training, and leadership coordination.

Compared to organisations lagging in these areas, Pacesetters show distinct characteristics. Kyndryl says they are 32 percentage points less likely to cite their tech stack as a barrier, 30 percentage points more likely to report their cloud infrastructure can adapt to new regulations and 20 percentage points less likely to have experienced a cyber-related outage in the past year.