IT companies worldwide are currently directing their efforts towards Gen AI, undertaking pilot projects, and emphasising the upskilling of their workforce to avoid falling behind in this transformative era.

Accenture, in particular, has made a significant commitment, pledging a $3-billion investment over three years in data and AI.

During an earnings call on June 22, 2023, Julie Sweet, Chair and Chief Executive Officer of Accenture, remarked, "No previous technology wave has captured the attention of leaders and the general public as fast as Gen AI. We are now embarking on the age of AI, and companies will need to reinvent how they operate with AI at the core. And it is also early. Think of it as the cloud over a decade ago."

In fact, the early successes of gen AI are already apparent, as Accenture reported selling over 100 generative AI projects in the past few months, totalling approximately $100 million in sales. The company also intends to double its data and AI workforce from 40,000 to 80,000.

The French information technology giant, Capgemini, has also unveiled plans to invest 2 billion euros in Gen AI or generative AI over the next three years. During their earnings call with investors, Capgemini disclosed that they are currently engaged in "hundreds of projects." While many of these initiatives are relatively small in scale, the company is implementing a rapid scaling strategy that outpaces the prior 'digitalisation' wave of investments.

Additionally, Cognizant has announced a $1 billion investment in the technology over the next three years to enhance its Gen AI capabilities. Similarly, Wipro is planning to invest $1 billion in advancing its AI capabilities over the same period. To leverage the potential of AI technology, Wipro has introduced the Wipro ai360 ecosystem.

Wipro's CEO, Thierry Delaporte, emphasised the rapid evolution of artificial intelligence, especially with the emergence of generative AI, and expects significant transformative changes across all industries. He mentioned, "Artificial intelligence is a fast-moving field. Especially with the emergence of generative AI, we expect a fundamental shift up ahead, for all industries. New business models, new ways of working, and new challenges too."

This sentiment is also shared by other major players in the Indian IT sector. TCS CEO K. Krithvasan commented, "In every conversation I have had with clients over the last three months, this topic has consistently come up."

Most Indian IT companies are focussing on pilot projects and training their headcount.

Tata Consultancy Services (TCS): TCS is at present actively involved in conducting over 50 proof of concept initiatives and pilot projects, with an additional approximate 100 projects in the pipeline.

The company has successfully trained a workforce exceeding 50,000 associates in the field of AI and has ambitious plans to expand this talent pool to encompass over 100,000 Gen AI-trained associates.

Infosys: Infosys is currently immersed in 80 Gen AI projects for its clients. Further, the company has taken proactive measures to ensure the upskilling of its workforce by training 40,000 employees in Gen AI.

HCL Technologies (HCL Tech): HCL Tech is engaged in a diverse portfolio of over 140 projects, both internal and external, spanning various stages of development and maturity.

Some examples of pilot projects that IT companies are actively working on in the field of Gen AI have been shared with analysts during the earnings call.

TCS: TCS is currently involved in a Gen AI pilot project with a travel insurance company. This project aims to revamp customer service by implementing contextualised chatbots capable of providing precise responses to any queries.

Accenture: The multinational bank is employing generative AI to handle post-trade processing emails. This involves the automatic generation of messages with recommended actions and their subsequent routing to the intended recipients.

Cognizant: The prominent healthcare product company is harnessing the power of Gen AI to author scientific content, expediting their research endeavours. Cognizant has developed a specialised workbench that utilises GPT models to summarise and generate content from both unstructured and structured data sources, including laboratory information management systems. The overarching goal is to automate the production of regulatory content.

HCL Tech: The IT behemoth successfully implemented a generative AI-powered conversational bot with a human-like voice for a global healthcare company specialising in medical devices, diagnostics, nutrition products, and pharmaceuticals.

Goldman Sachs released a note on August 22, outlining the potential impact of generative AI on India's IT services sector. According to their analysis, Gen AI is anticipated to contribute an additional 50-100 basis points (bps) of incremental revenue growth to the Indian IT industry starting from FY25.

According to Goldman Sachs, it anticipates that enterprises will likely develop AI-related products through a combination of their internal tech teams and external IT service providers. These investments are expected to start reflecting in budgets beginning in the year 2024.

It also noted that IT services companies are poised to play a crucial role in several aspects, including data migration to the cloud (as a precursor to the adoption of Gen AI), the construction, customisation, and integration of Gen AI enterprise solutions, as well as application deployment.

Regarding profit margins, Goldman Sachs expects that the initial margin benefits resulting from the deployment of Gen AI to enhance internal productivity will eventually be mostly passed on to clients due to competitive pressures.

While all companies stand to benefit to some extent from the adoption of Gen AI, those with a broader geographical presence and deeper expertise in specific industries are likely to experience more significant advantages.

(Edited by : Shoma Bhattacharjee)

First Published:Sept 1, 2023 8:13 PM IST