IT services in the era of enterprise AI

AI will help IT experts do more, on a bigger scale and across a wider canvas, than ever before. A look at the five big opportunities it presents

- N CHANDRASEKARAN

India’s technology industry built its global position by doing something many thought it couldn’t — taking powerful new technologies and making them work, reliably and accountably, inside the world’s most demanding institutions. Some say artificial intelligence (AI) poses a fundamental threat to that model. But I think that far from being a mortal threat, AI is the most significant opportunity yet for enterprise IT.

In late 2024, artificial intelligence reached what looked like an ominous milestone for India’s IT services sector. Agentic AI suddenly seemed capable of the main tasks our industry is built around — writing code, testing software, running technology operations.

India’s Nifty IT index fell more than a third. Globally, shares in technology services and platform companies — from Accenture to SAP to Salesforce — plummeted.

And yet, margins have held. Revenues are up. The deal pipeline is stronger than ever.

So what’s going on? I believe the disparity stems from a misconception surrounding the relationship between AI and IT services.

No one can deny that AI tools reduce the need for human input in the building and maintenance of software. Self-managing AI systems do not need “servicing” in the traditional sense.

However, AI does more than subtract the need for human effort. It also dramatically expands what is possible. When steam engines made coal more efficient, we did not use less coal — we used more, because it unlocked new uses and opportunities. AI will help IT experts do more, on a bigger scale, and across a wider canvas, than ever before.

As the cost of intelligence falls, many more processes, decisions and interactions — in many more industries — will become candidates for AI-driven transformation.