India’s IT Industry Reinvented!

"India’s IT Industry Reinvented: Embracing IP-Led Growth in the Age of Gen AI"

India's top IT firms are pivoting towards intellectual property (IP)-led growth as generative AI (Gen AI) reshapes traditional service models. This strategic shift is driven by the need to adapt to the transformative impact of Gen AI on the industry.

Embracing IP-Led Growth

Leading IT companies like Infosys, TCS, Wipro, and HCLTech are increasingly focusing on developing proprietary platforms and solutions. For instance, Infosys has launched over 400 Gen AI projects in FY25, leveraging its AI-powered services and solutions to deliver innovative offerings to clients.

This move towards IP-led growth allows firms to differentiate themselves in a competitive market and create new revenue streams beyond traditional service contracts.

The Impact of Gen AI on Traditional Models

Gen AI is automating routine tasks such as code generation, testing, and quality assurance, leading to increased efficiency and reduced reliance on large teams. TCS, for example, reports that Gen AI has accelerated product development cycles by up to 20% in its engineering services division.

This automation is prompting a reevaluation of the traditional pyramid structure in IT services, where a large base of junior employees supports a smaller number of senior professionals.

Talent Transformation and Upskilling

Despite concerns about job displacement, major IT firms emphasize the importance of upskilling and talent augmentation. Infosys, Wipro, and HCLTech have all stated that their focus is on enhancing employee capabilities rather than reducing headcount. They are investing in training programs to equip their workforce with the skills needed to work alongside AI technologies.

Developing Indigenous AI Capabilities

Recognizing the strategic importance of AI, Indian IT leaders advocate for the development of indigenous AI models. Infosys Chairman Nandan Nilekani predicts that companies will increasingly build their own smaller-scale AI models to streamline operations and boost productivity. Similarly, HCLTech CEO C Vijayakumar emphasizes the need for Indian IT firms to create their own language models to reduce dependency on foreign technology and navigate geopolitical challenges. 

Conclusion

As Gen AI continues to evolve, India's IT sector is proactively adapting by shifting towards IP-led growth, transforming talent strategies, and developing indigenous AI capabilities. These initiatives aim to position Indian IT firms at the forefront of innovation, ensuring their competitiveness in a rapidly changing global landscape.