AI May Disrupt IT Revenue But Could Drive Next Growth Phase

India's IT services sector faces a paradox as artificial intelligence advances. While the technology threatens to disrupt established business models that have long generated revenue for the industry, it simultaneously creates new opportunities for growth and transformation. According to reports, Rohan Korde of Baroda BNP Paribas Mutual Fund views this transition as a natural evolution rather than an existential threat. The fund manager's assessment acknowledges that traditional IT service revenue streams may face pressure, yet he identifies specific areas where the sector can build its next growth engine. Enterprise AI deployment, data engineering, cybersecurity, cloud integration, and specialised chip infrastructure emerge as the primary opportunity zones. These segments represent the digital infrastructure and expertise that organisations across sectors will require as they transition to AI-driven operations. Korde's outlook extends beyond technology itself, focusing on the industries most likely to drive demand for these IT services. Financial services, healthcare, and consumer services sectors are positioned as the most promising end-markets over the coming three to five years. These verticals typically invest heavily in digital transformation, cloud migration, and data security initiatives, creating sustained demand for IT services expertise. The perspective underscores how India's IT industry, despite near-term headwinds from AI-driven automation, possesses the foundational capabilities to adapt and thrive. Rather than viewing AI as purely disruptive, the assessment presents it as a catalyst for structural evolution within the sector, requiring IT companies to shift their service offerings and focus toward higher-value, technology-intensive solutions.

Source: Markets-Economic Times