There is a stark contrast between the experiences of AI leaders and AI laggards, a new global report from NetApp has revealed.

Their 2024 Cloud Complexity report provided global insight into the readiness, challenges, progress, and momentum over the past year in AI adoption, and the critical role of a unified data infrastructure.

“AI is only as good as the data that fuels it,” said Pravjit Tiwana, general manager and senior vice president of Cloud Storage at NetApp. “Both the AI leaders and AI laggards show us that in the prevailing hybrid IT environment, the more unified and reliable your data, the more likely your AI initiatives are to be successful.”

AI Leaders vs AI Laggards

The report found a clear divide between AI leaders and AI laggards across regions, industries, and companies of different sizes.

Regionally, 60% of AI-leading countries, which include India, Singapore, the UK, and the USA, have AI projects up and running or at least at the pilot stage. This is in contrast to only 36% of what NetApp calls AI-lagging countries, including Spain, Australia, New Zealand, Germany, and Japan.

Across industries, technology leads with 70% of AI projects up and running or in pilot, while banking and financial services and manufacturing following with 55% and 50% respectively.

However, healthcare (38%) and media and entertainment (25%) are trailing.

Larger companies, those with more than 250 employees) are more likely to have AI projects in motion, with 62% reporting projects up and running or in pilot, versus 36% of smaller companies (with fewer than 250 employees).

AI leaders and laggards show a difference in their approach to AI, as well as their readiness.

Globally, 67% of companies in AI-leading countries report having hybrid IY environments, with India leading (70%), and Japan lagging (24%).

AI leaders are also more likely to report benefits from AI, including a 50% increase in production rates, 46% in the automation of routine activities and a 45% improvement in customer experience.

“The rise of AI is ushering in a new disrupt-or-die era,” said Gabie Boko, chief marketing officer at NetApp. “Data-ready enterprises that connect and unify broad structured and unstructured data sets into an intelligent data infrastructure are best positioned to win in the age of AI.”

Innovation Key

Despite the divide, there is notable progress among AI laggards in preparing their IT environments for AI, but the window to catch up is closing rapidly.

A significant number of companies in AI-lagging countries (42%) have optimised their IT environments for AI, including Germany (67%) and Spain (59%).

Further, some companies in AI-lagging countries already report seeing the benefits of a unified data infrastructure in place, such as easier data sharing and increased visibility.

Costs and Security

Rising IT costs and ensuring data security are two of the biggest challenges in the AI era, but they will not block AI progress.

Instead, AI leaders will scale back, cut other IT operations, or reallocate costs from other parts of the business to fund AI initiatives.

AI leaders are set to increase their cloud operations, data security, and AI investments throughout 2024, with 40% of large companies saying AI projects have already increased IT costs.

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Year over year, “increased cybersecurity risk” jumped 16% as a top concern from 45% to 61%, while all other concerns decreased.

To manage AI project costs, 31% of companies globally are reallocating funds from other business areas, with India (48%), UK (40%) and US (35%) leading this trend.

As global companies, whether AI leaders or AI laggards, increase investments, they are relying on the cloud to support their goals.

Companies reported that they expect to increase AI-driven cloud deployments by 19% from 2024 to 2030, with 85% of AI leaders planning to enhance their CloudOps automation over the next year.

Increasing data security investments is a global priority as well, jumping 25% from 33% in 2023, to 58% in 2024.