Artificial intelligence is dramatically changing business model: IT bosses

Mumbai: The IT services industry’s business model looks set for a big transformation, with AI disrupting the linear relationship between revenue and employment. The acknowledgement of that from the leaders of the industry was one of the highlights of Nasscom Technology Leadership Forum 2025, the industry association’s flagship event that began here on Monday.

HCLTech CEO C Vijayakumar said the industry is getting to a stage where revenue growth will double with half the people that are currently required for that level of growth. “What we saw in the last 30 years was a linear scaling of IT services. Time is out for that model…what is fundamentally changing is something which we need to recognise and react to,” Vijayakumar said. Cognizant CEO Ravi Kumar said that more and more code will be written by AI agents. Currently, in Cognizant, 20% of the code is written by AI, and that number, Kumar said, will keep going up. Coding, he said, is the most mainstream use case of AI. That’s because it’s possible to train AI systems on very precise codes, and therefore what you get as output will also be very precise. India has a reputation for being a land of coders, but that strength could now be undermined by AI.

Infosys CEO Salil Parekh said the IT services sector should be more paranoid, and not be complacent about keeping pace with the change in the industry.

All of them noted also that AI will enable a whole lot of new solutions in every field, and the onus is on the IT services industry to change their talent mix, as also upskill people, in order to take ad- vantage of the new opportunities.

Vijaykumar said in HCLTech, there is a shift in the mindset from delivering value to clients to thinking about creating more opportunities. “We have people with a lot of aspirations. So how do you really take care of people’s aspirations while adopting these technologies? How can we create more value are questions,” he said, adding that “if you challenge yourself in that direction then the business will un- lock a completely new growth. Kumar said he’s telling all his employees to use code assist platforms as much as possible. He said once the productivity bene- fits from this are passed on to clients, the clients will give you even more business- those that they were either doing in-house, or giving to other IT services part- ners. He said that indeed happened in the case of a Cognizant client to whom he shared productivity benefits from AI.

‘There’s risk in India not building LLM’

HCLTech CEO C Vijayakumar said geopolitics is an important reason or India to build its own language models. He indicated that there is the risk of India getting shut out of models like DeepSeek and OpenAI. “Countries can limit use of these beyond their boundaries. To have a long term competitive advantage, it makes sense to build these models, as also the infrastructure to train these models,” he said. Infosys CEO Salil Parekh said as more and more language models-both large and small-are being built across the globe, the cost of building models is coming down. “When the time comes, we have to invest in building small language models. With cost coming down, we need to make investments to create a foundation,” Parekh argued.

Parekh said the new work created by AI is giving them the confidence to add more freshers next year. The company has planned to hire 15,000 to 20,000 fresh graduates next year. But industry sources say the nature of hires could be different from what it has been so far.

Vijaykumar said if the IT services industry is “paranoid” about the change like an “existential threat”, it will come out winners in the long term.

Source: GWFM Research & Study