This chapter examines the readiness of the architecture, engineering, construction and operation (AECO) industry to adopt artificial intelligence (AI) and addresses the technological, organisational and environmental challenges. While AI promises transformative efficiencies, its implementation in construction remains limited due to risk aversion, industry fragmentation, regulatory constraints, and cost sensitivity. To assess and guide AI adoption, the chapter introduces the AI Readiness Index (AIRI), based on the Technology-Organisation-Environment (TOE) framework. This metric assesses seven dimensions: vision, data, systems, digital foundation, talent, value, and governance. Using survey data from AECO firms, the AIRI reveals significant differences in readiness, with large firms having greater infrastructure capacity but facing challenges in the system and talent dimensions, and smaller firms having greater innovation potential due to their agile structures. The chapter identifies a general lack of readiness across the industry, with most firms failing to meet the minimum requirements for effective AI adoption. The findings underscore the need for strategic investment and targeted efforts to improve the dimensions of readiness, particularly in the areas of skills development and digital infrastructure alignment. This study provides a critical framework for firms and policymakers to navigate the complexities of digital transformation and accelerate AI integration in the AECO sector.