Generative AI models such as ChatGPT will slow down market share gains and deflate pricing for Indian IT companies in the short term, analysts at J.P.Morgan said.
As generative AI is implemented more broadly, consulting firms like Accenture and Deloitte will gain market share over Indian IT services firms like Infosys, TCS and Wipro in the near term, analysts at the brokerage said in a note to clients.
Generative AI can be a deflation driver in the near term on legacy services as they compete on pricing, necessitate staff retraining and drive loss of competitiveness.
ChatGPT is likely to deflate legacy services the most and application services the least.
Artificial intelligence company OpenAI’s chatbot has attracted experts due to its ability to spit out haikus, debug code and answer questions while imitating human speech, helping it attract a $10 billion investment from Microsoft earlier this month.
Large tech companies like Alphabet and China’s Baidu have also rushed to announce their own in-house developments of generative AI.
JPM said that among Indian IT companies, Infosys and TCS might retrain staff faster than smaller peers due to their better graduate hiring and training infrastructure.
