The rapid adoption of artificial intelligence (AI) has transformed industries worldwide, offering promises of automation, efficiency, and faster decision-making. However, for several established companies, this transformation has come at a cost. Many have reported declines in revenue and loss of customers as AI-driven tools and platforms disrupt traditional business models, reduce demand for human-led services, and shift market dynamics toward newer, tech-enabled competitors.
Chegg – Education Technology
Chegg reported a sharp decline in users and revenue after students shifted to free AI tools like ChatGPT. Subscriber numbers dropped around 31 percent, leading to a ~30 percent fall in revenue, as demand for its paid homework-help service eroded rapidly.
Appen – Data Labeling Services
Appen, which provides data for AI model training, saw a ~30 percent revenue decline in 2023 as major tech firms built their own in-house data pipelines and automated annotation using AI, reducing dependence on external data-labeling vendors.
Wipro – IT Services
Wipro’s legacy business lines faced pressure as clients used generative AI to automate support and maintenance tasks. The company reported a ~2.3 percent year-on-year revenue decline, with traditional outsourcing contracts becoming smaller due to AI-driven efficiency gains.
Tata Consultancy Services (TCS) – IT Services
TCS reported slower revenue growth (~1.3 percent) as automation and AI adoption reduced demand for traditional IT services. Many clients are re-evaluating large labor-based deals, affecting the company’s near-term growth momentum.
C3.ai – Enterprise AI Software
Despite being an AI-focused company, C3.ai’s Q1 FY2026 revenue fell 19 percent to about US$70.3 million. The drop underscores how hype around AI adoption has not yet translated into consistent commercial growth across enterprise customers.
Baidu – Technology / Internet (China)
Baidu’s legacy advertising business shrank 7 percent, while overall revenue dipped ~2 percent. Heavy spending on generative AI development further pressured margins, driving a ~48 percent fall in quarterly net profit, despite modest topline growth in some segments.
S4 Capital – Digital Advertising
S4 Capital warned of a ~10 percent fall in first-half net revenue as advertisers moved content creation and media planning in-house using AI tools. The shift has disrupted the traditional agency model, especially for digital and content-heavy campaigns.
Builder.ai – AI Startup (No-Code App Builder)
Builder.ai, an AI-driven app development startup, collapsed into insolvency after overstating growth projections. Revenue expectations fell dramatically as investor sentiment cooled and demand failed to match AI-era promises.
TomTom – Navigation and Mapping
TomTom is restructuring around AI and automation, cutting 300 jobs. It expects annual revenue to fall from ~€574 million in 2024 to between €505–565 million in 2025, reflecting the shift from manual mapping to AI-driven systems and reduced enterprise demand.
Adobe and Creative Tools Sector
Creative software firms such as Adobe face slower demand growth as AI-generated imagery and design tools disrupt traditional content workflows. Market valuation and licensing growth have come under pressure amid the proliferation of generative design apps.
Translation and Content Production Industry
AI-powered translation and writing tools are displacing traditional service providers. High-margin translation and content creation businesses have seen sharp revenue declines as clients adopt neural machine translation and generative content systems.
RWS Holdings, a UK-based language services firm, has issued a profit warning: adjusted pre-tax profit dropped sharply (from £46 m to ~£17 m) for the six months to March 31, and full-year revenue is expected to fall ~1.8 percent to ~£344 m. The weakness was tied to pressure from AI-driven translation tools, Financial Times reports.
TransPerfect, a global language-services firm, said its revenue rose ~3 percent in 2024. But the company noted its traditional translation services line is facing headwinds because more and more projects are suitable for automated solutions.
The language-services & technology industry reported a 4.5 percent drop in global revenue from ~US$52.01 billion in 2022 to ~US$49.68 billion in 2023 — the decline was attributed in part to the rise of generative-AI translation/automation.
Knowledge / Process Outsourcing (KPO / BPO) Sector
Mphasis, a BPM player based in India, reported a 6.6 percent decline in revenue in fiscal year 2024, as it navigates automation/AI disruption in its business.
WNS Global Services, India-based BPO, noted a revenue decline of 0.6 percent to $1.31 billion in the latest year; this sluggish growth is happening amidst concerns about generative-AI’s impact on the BPO model.
Tech Mahindra’s BPO division posted 7.12 percent growth in FY24 (its slowest since FY18) as clients re-negotiate contracts and shift to AI/self-serve channels.
While AI continues to unlock new growth opportunities, its disruptive nature serves as a reminder that innovation often brings both winners and losers. For businesses affected by the shift, adapting through reinvention, skill development, and strategic integration of AI technologies will be key to regaining momentum in the evolving digital economy.
Rajani Baburajan
