Is the worst of AI deflation over? Depends on which IT boss you ask
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Indian IT leaders are divided on whether AI-driven deflation has peaked.
- ✓HCLTech CEO C Vijayakumar said, “I would say we are in the early phases of deflation.” While TCS expects the impact to subside, Tech Mahindra dismissed the concerns.
- ✓Meanwhile, firms reported modest growth as they navigate these new shifts.
Story at a Glance
- Category
- BUSINESS
- Reported By
- Livemint
- Reading Speed
- 4 Minute(s)
- Market Focus
- India Economy
“As model and agentic capabilities continue to improve, we think the efficiency hurdle is likely to rise, requiring an increasing amount of new scope, share gains, and new AI-related work to offset pressure on the legacy base,” Keith Bachman, an analyst at BMO Capital Markets, wrote in a 14 October note.
“Now this deflationary impact, I think there is no one way to define how much deflation is already there and how much is yet to come. I would say we are in the early phases of deflation,” C Vijayakumar, chief executive of HCLTech, told reporters during the company's post-earnings press conference on 12 October. Vijayakumar was among the first Indian IT executives to flag the deflationary risk of AI. HCLTech reported $219 million in advanced AI revenue for the quarter, up 28% sequentially.
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