Artificial Intelligence (AI) is set to enhance, not eliminate, the demand for IT services, according to J.P. Morgan’s report on Indian IT firms. It posits that AI will serve as an effective tool to manage increased workloads within existing budgets, akin to prior technology evolutions like offshore labor and cloud computing. The report highlights a growing need for the modernization of legacy systems, development of customized SaaS applications, and building reliable AI agents. Enterprise tech teams, often seen as underfunded, can leverage AI to boost productivity without replacing service providers. It cautions against the misconception that AI can independently generate enterprise-grade software, emphasizing that IT firms serve as the essential “plumbers” of the tech ecosystem, requiring specialized expertise. The recent downturn in the Nifty IT index reflects concerns about AI’s impact on revenue growth for Indian IT services, despite its potential to open new avenues for work.
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