Tariffs, AI unleashing unprecedented uncertainty: Infosys chairman Nilekani

Nilekani cautioned that tariffs, which have become a lightning rod across the globe for their impact on various industries, are underscoring the need for companies to diversify their sourcing

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Infosys chairman Nandan Nilekani has said that enterprises are in an era of uncertainty never seen before due to geopolitics, tariffs, trade war, and artificial intelligence that is making them go back to the drawing board to chart the future course of action.

 

“Multiple trends are colliding and leading us to re-examine the fundamentals of our businesses,” Nilekani said in the company’s  annual report for the financial year 2024-25 (FY25).

 

Nilekani cautioned that tariffs, which have become the lightning rod across the globe for its impact across industries, are driving home the point that companies need to diversify their sourcing. That is similar to the trend during the pandemic when companies had to de-risk supply chains and build viable alternatives.

 

“Tariffs will be differentiated across products and countries and will likely keep changing. Bilateral and regional rules of trade will dominate. Supply chains will continue to shift as tariffs become another form of arbitrage,” he added. 

 

AI, similarly, while being a game changer, is not devoid of inherent risks and challenges as seen over the last few years as companies embark on an AI strategy for large scale adoption. The primary challenge is to modernise legacy systems and create data architecture so that all the firm’s data is consumable by AI.

 

“While embracing AI will bring a goldmine of opportunities, it will not be entirely without some foreseeable risks. Regulatory variances across regions will need to be incorporated into one’s strategy,” he said.

 

Nilekani also said that companies need to have an AI foundry for rapid innovation and an AI factory to scale successful innovations across the enterprise. There is not a sector that remains unscathed as rapid business and technological disruption forces businesses to adapt and advance.

 

The company’s annual report said that it has delivered over 400 generative AI projects by bringing Infosys Topaz-- generative and agentic AI-powered services and solutions.

 

For FY25, Infosys reported revenue growth of 4.2 per cent and an operating margin of 21.1 per cent.