Cost concerns are forcing IT clients to slow down their take-up of artificial intelligence, a top Infosys executive said.
“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 No2 software services exporter, cautioned.
Satish said firms’ budgets are instead being eaten up by “absolutely essential” requirements, such as building resilience to cyber attacks, which may delay AI scale-up.
“Some of those priorities are reducing the pace at which organisations go [for AI],” 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.
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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 still 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.
- Reuters with additional editing by Sean O’Meara
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