AI transition will be painful but IT industry will reinvent: HCLTech CEO

C Vijayakumar says the $283 billion IT industry faces a difficult AI-led shift, but frontier model firms and services players will drive long-term value creation

The information technology (IT) industry is going through a “painful transition” due to AI but writing its obituary is wrong, said C Vijayakumar, chief executive officer and managing director of HCLTech.

 

Indian-American venture capitalist Vinod Khosla last week said that artificial intelligence could render traditional employment obsolete within decades and disrupt India’s outsourcing industry. His warning came amid Anthropic accelerating the shift towards autonomous “agentic” workflows, providing the high-reasoning models that enable businesses to automate complex cognitive tasks previously managed by the IT and BPO sectors.

 

Vijayakumar refuted claims that the $283 billion Indian IT industry may become obsolete due to AI. “I think the industry is going to reinvent itself. This time the inflexion is really making a lot of what we do or people do can be done a lot more efficiently and with significant speed. I think this transition is different from other transitions. It will be painful as it involves people but there is a promising road ahead,” he said.

   

Value creation in the AI ecosystem will not be evenly distributed.

 

“There are multiple stacks — semiconductor and OEM players, hyperscalers, SaaS firms, the frontier companies and then the services players. I think the bigger value will get created in the long run from frontier model companies and services providers because service providers have the most enterprise context,” he said while speaking in a fireside chat with Noshir Kaka, Senior Partner at McKinsey & Company, at the Nasscom Technology Leadership Forum.

 

He emphasised that services firms play a crucial role because they understand enterprise workflows, regulatory requirements and operational complexity.

 

However, Vijayakumar cautioned that a gap remains between the pace of technological evolution and its actual deployment within enterprises.

 

“When it comes to enterprise context, there is a big lag between how fast technology is evolving and how it is getting deployed at the end of the day. That is where the challenge is going to be,” he said.