Psychological safety has emerged as a decisive factor in determining whether enterprise artificial intelligence (AI) initiatives succeed or stall, with 83 percent of business leaders saying it has a measurable impact on AI outcomes, according to a new report by Infosys and MIT Technology Review Insights.
The report, Creating Psychological Safety in the AI Era, finds that despite rapid advances in AI technology and growing enterprise investment, human and cultural barriers continue to hold organisations back.
Fear of failure, unclear communication and limited leadership openness often prevent employees from fully engaging with AI programmes, even when the technical capabilities are in place.
According to the study, employees frequently hesitate to experiment, challenge assumptions or lead AI projects due to concerns about criticism or backlash. This hesitation undermines innovation and slows adoption, turning workplace fear into one of the biggest obstacles to scaling AI across enterprises.
More than four out of five respondents said psychological safety directly influences the success of AI initiatives, while 84 percent reported a clear link between psychological safety and tangible business outcomes. At the same time, nearly one in four leaders admitted they had held back from proposing or leading AI projects because of fear of failure or negative feedback.
The findings also point to a gap between enterprise ambition and cultural readiness. Fewer than half of respondents described the current level of psychological safety in their organisations as high, even as companies accelerate AI deployment. Nearly half said their organisations operate at only a moderate level of psychological safety, raising questions about the foundations on which AI strategies are being built.
Clear communication and leadership behaviour emerged as critical levers.
Sixty percent of respondents said clarity on how AI will and will not affect jobs would most improve psychological safety, while 51 percent pointed to leaders actively modelling openness to questions, dissent and failure as equally important.
Infosys said the collaboration is aimed at helping global enterprises adopt AI responsibly at scale, supported by Infosys Topaz, its AI-first suite of services, solutions and platforms.
Rafee Tarafdar, Chief Technology Officer at Infosys, said organisations that foster psychological safety see stronger AI outcomes. “This culture of trust and openness enables teams to unlock the full potential of AI, driving meaningful business outcomes and sustainable growth,” he said.
The report says that enterprise AI transformation is not only a technological journey but also a cultural one, with psychological safety emerging as a core requirement for building trust, resilience and long-term value from AI investments.
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