Indian IT Cos Gearing Up For AI Boom

Indian IT firms are trying to do works with enterprises directly through their own enterprise-AI solutions like SLMs (small language models), training modules and related other solutions. So, Indian IT firms are positioning themselves in such a way that whoever wins, they will get business - Pareekh Jain, an IT outsourcing advisor & Founder of Pareekh Consulting, told Bizz Buzz

Bengaluru: Positioning of Indian IT and engineering services firms is on the right track to cash in the emerging demand for artificial intelligence (AI) globally. According to IT sector experts, setting up Centres of Excellence (CoEs) focussed on AI, collaboration with chip giants like Nvidia and upskilling of employees in AI technology are some of the initiatives taken up by Indian IT industry players to increase business share coming from this new segment.

This is despite the fact that any meaningful revenue accretion from AI is yet to be reflected in the profit and loss (P&L) accounts of all these companies.

“IT firms are experimenting now with a lot of PoCs (proof of concepts). Thousands of engagements with related to AI & generative AI are going on. They are also setting up AI offices. Another development is that most service providers now have Nvidia units. Indian IT firms are anticipating that a lot of work will be done through Nvidia chips. They are trying to do work with enterprises directly through their own enterprise-AI solutions like SLMs (small language models), training modules and related other solutions. So, Indian IT firms are positioning themselves in such a way that whoever wins, they will get business,” Pareekh Jain, an IT outsourcing advisor & Founder of Pareekh Consulting, told Bizz Buzz.

He also said that Indian IT firms are dependent on major enterprises to make investment for generating projects in the AI space.

Notably, except Accenture, no other IT firm in India and other geographies are giving the revenue coming from the generative AI space. However, most companies are providing details of number of engagements in the AI & GenAI space in recent quarters. They are also aggressively investing in building capabilities in this space.

“We have not been disclosing the AI / GenAI TCV, but it has been improving very well, almost doubling every quarter and the pipeline also remains very strong. As of this (Q2FY25) quarter, the engagements in AI/ GenAI, including the POCs, POVs, and production, we are doing more than 600 engagements, which increased from almost 270 last quarter. It’s a very significant increase in the number of engagements,” K Krithivasan, CEO of Tata Consultancy Services, had said during the analyst call.

According to the Tata Group company, it saw around 86 engagements going into production in September quarter as compared to eight engagements in the previous quarter.

Globally, Wall Street has been disappointed with big tech firms like Meta, Google, Microsoft, Amazon and others after some reported less than expected AI revenue despite heavy investments.

However, sources in the know said that Indian IT firms may not see such selling pressure as they are not developing solutions through heavy investments.