Realizing the Value of AI Cisco AI Readiness Index 2025 Contents Executive SummaryThird edition overview: AI readiness is a journey, not a destinationMost chase value. The Pacesetters capture it.Value is moneyValue is more than moneyAI agents can give us more if we build for moreAI Infrastructure Debt is a real risk to value0304060811151822Conclusion: Follow the PacesettersMethodology26 Executive Summary Now in its third year, theCisco AI Readiness Indexshows that whileambition continues to surge, a small but consistent group ofcompanies —the Pacesetters— outperform their peers across everymeasure of AI value. Of the organizations we survey worldwide,they’ve consistently represented 13% to 14% for the last three years.But far from stagnation, the Pacesetters are a persistent reminder thatreadiness isn’t a one-time achievement, but the ongoing workrequired to stay competitive as AI keeps evolving. Pacesetters adopt a disciplined, system-level approach that balances strategy, infrastructure, data, governance, peopleand culture. They plan ahead, invest early, and embed AI into the core of how they operate to help them keep pace withAI’s accelerating evolution and deliver lasting value. •Value ready:Around three-quarters (77%) have finalized their AI use cases — 4x higher than the global averageamong survey respondents.•Value managed:They are 3x more likely to track and measure the impact of their AI investments (95% vs 32% overall).•Value realized:Pacesetters are 1.5x more likely to report gains in profitability, productivity, and innovation(90%+ vs ~60% overall). AI agents raise the stakes, but ambition outpaces readiness The Index highlights a tension between the 83% of companies that plan to deploy agents and mounting pressures onenterprise foundations that struggle to scale for the complexity agents introduce. Pacesetters are once again, theexception, with almost all of them (98%) designing their infrastructure for future demands. Giving the strain on readiness a name The report also introduces a new concept —AI Infrastructure Debt— the modern evolution of technical and digital debtthat held back prior transformation efforts. It’s the often-silent accumulation of compromises, deferred upgrades, andunderfunded architecture that gets costlier the longer it’s ignored — slowing innovation, inflating costs, and erodingreturns. The Index makes some of the early warning signs visible: the need to upgrade, rising costs, GPU capacity, budgetconstraints and emerging threats. Pacesetters aren’t immune to AI Infrastructure Debt — but they’re better positioned to act. With strong governance,financial foresight, and cross-functional coordination, they have the resilience to help address AI Infrastructure Debt beforeit compounds into costlier risks. The Pacesetters have made readiness their competitive advantage AI readiness has become the ultimate differentiator — not because it guarantees innovation, but because it makesinnovation repeatable. As agentic systems and autonomous AI push organizations into an era of constant computedemand, the lesson from this year’s AI Readiness Index is clear: value follows readiness. And it’s the most AI-readyorganizations who are setting the pace. Third edition overview:AI readiness is a journey, not a destination Now in its third year, the 2025 Cisco Readiness Index showswhere the companies we surveyed stand on their journey toAI readiness and what it will take for them to stay competitive. The Index measures AI readiness of companies across six pillars: Strategy, Infrastructure, Data, Governance, Talent,and Culture. Based on their readiness scores, organizations are categorized into four levels: 1.Pacesetters (fully prepared)2.Chasers (moderately prepared)3.Followers (limited preparedness)4.Laggards (unprepared) A familiar pattern with a twist Despite continued investment and focus on AI, readiness among respondents fails to keep up with rising demand.Compared to last year’s report, movement across the four categories of readiness is minimal. But this year’s Indexlooks more closely at the small but consistent group of companies - the “Pacesetters,” about 13% of organizationssurveyed worldwide over the last three years - to understand how they outperform their peers across every measure ofAI value. Their sustained advantage suggests it’s their disciplined, system-level readiness that balances strategic driverswith the data and infrastructure, helping them keep pace with AI’s accelerating evolution and deliver real, tangible value. Surging workloads put pressure on readiness while ambition races ahead As the pattern holds, the stakes continue to soar. The rise of AI Agents is ushering in a new era in which companiesadopting AI will need to share their digital infrastructure with resource-intensive models. Systems must now operate ona different scale and deliver new kinds of value. Yet companies’ confidence about their infrastructure’s ability to handlethe new dema