Chinese AI Tools Augur Well For Indian IT Cos

From Indian IT services perspective, it’s good news because more models will come, which will democratise the use of AI. More enterprises can use AI applications and cost of operations is likely to come down. As a result, IT firms are likely to get more servicing work from enterprises - Pareekh Jain, Founder, Pareekh Consulting, tells Bizz Buzz

Bengaluru: Indian IT companies are likely to benefit from increasing competition in the AI (artificial intelligence) space with the entry of Chinese players like DeepSeek and Alibaba’s Qwen as more innovation will lead to higher project works in servicing and maintenance segments.

Experts are of the opinion that just like cloud computing segment, more players in AI will democratise its access through increased choices for end-users. Such development helps in breaking the dominance of a few players, which will lead to better pricing for customers. They also said that though some technology firms in the US like Microsoft, OpenAI, Google, Nvidia and others may find this competition tough, but for Indian IT services industry, more players augur well for the whole ecosystem.

“From Indian IT services perspective, it’s good news because more models will come, which will democratise the use of AI. More enterprises can use AI applications and cost of operations is likely to come down. Earlier, only big firms with access to costly chips were able to do it, and now more companies will be able to access that. As a result, IT firms are likely to get more servicing work from enterprises,” Pareekh Jain, an IT outsourcing advisor & Founder of Pareekh Consulting, told Bizz Buzz.

“The only challenge that may come in the form of heavy investment by Indian IT firms on Nvidia ecosystem. That approach may see some recalibration,” he added.

Global technology industry has taken by a storm recently when Chinese hedge fund, High-Flyer-backed DeepSeek came up with a chatbot at a fraction of investment that big US technology companies have invested for building foundational LLM.

In a research paper released last week, the model’s development team said they had spent less than $6 million on computing power to train the model. As DeepSeek runs on open-source model, many analysts argue that this will break the monopoly of US technology companies in the AI space. Not only DeepSeek, Chinese tech firm Alibaba has released an AI chatbot Qwen, which it claims to be better than the former.

As a response, US tech giants like Nvidia have been seeing rout in their stocks as investors seemed worried about their astronomical valuations on the back of rapid development in AI space.

However, sources in the know said that critical sectors in India like healthcare, banks, armed forces and others are unlikely to see much adoption of Chinese AI apps owing to security concerns. However, many emerging economies in Asia, South America and Africa are likely to adopt Chinese apps at a faster rate.

“At the end, just like cloud technology where many players including Amazon, Google, Microsoft and Alibaba are operating, AI space may see such trend playing out,” said another source.