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"You have to think about return on investment, because this
tech, unlike the other ones, is high on cost," Satish HC,
executive vice-president and co-head of delivery at India's No.2
software services exporter, told Reuters.
Clients have focused on cost-takeout projects in recent times.
Satish said budgets are being eaten up by "absolutely essential"
requirements, such as making themselves resilient to cyber
attacks, which may delay AI scale-up.
"Some of those priorities are reducing the pace at which
organizations go," Satish added.
The Indian information technology sector is expected to grow a
modest 3.8% to $253.9 billion in the year ending March 2024, as
clients cut spending and delay decision-making amid inflationary
pressures and global economic uncertainty.
While some companies may not be ready for AI scale-up due to
reasons such as not being data-ready, the technology is being
adopted rapidly by others for the higher opportunity it
provides, he said.
Infosys, however, is optimistic about its bet on the futuristic
technology.
"At Infosys, I don't think we were digital first... It took us a
few years, but now that we have the hindsight of how we adapted
to digital, we are adapting to AI much better and I think we are
going AI first," he said.
While 2023 was a "sliding slope", 2024 could be a year that lays
the foundation for the future, he added.
India's AI market is projected to touch $17 billion by 2027,
growing at an annualised rate of 25-35% between 2024 and 2027,
according to industry body Nasscom and consulting firm BCG.
"I think you can build a lot of foundation for acceleration.
That's why I call this a bridge year," he said, adding he still
does not expect clients to splurge.
"I don't see that significantly changing because half the world
is going through elections this year," Satish added.
(Reporting by Haripriya Suresh; Editing by Dhanya Skariachan and
Eileen Soreng)
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