AI won't replace companies like Infosys: Chairman Nandan Nilekani

Nandan Nilekani says Infosys' role in the AI era is helping enterprises bridge the gap between AI investments and real business outcomes

Infosys chairman Nandan Nilekani said the relevance of Information Technology (IT) services companies such as Infosys lie in closing the artificial intelligence (AI) deployment gap of their clients between investment and returns on investment of the new technology. 

AI, generative AI (Gen AI) and agentic AI are improving productivity, pushing up efficiency of employees across sectors and boosting the software development life cycle by compressing processes. However, deployment and adoption across enterprises have proved tougher than expected due to issues like change management and fragmented data. 

“The AI deployment gap in our large enterprise clients is real, and closing that gap is where the work is. AI will not replace companies like ours. It will amplify those who move with purpose and adapt with speed,” Nilekani said at the company’s 45th annual general meeting (AGM) on Tuesday. 

 

Nilekani added that while companies embrace the best coding tools and improve productivity, there is much more to do in the software development life cycle as context is paramount in an enterprise. “Solutions must complement existing investments. They demand rigorous testing, resilient architecture, and foundational cybersecurity. Data governance must reflect an organisation’s own obligations, not the convenience of any external platform or provider. 

The doomsday of IT services companies has been talked about often since the start of this year as frontier model companies such as OpenAI and Anthropic release superior models, which automate a vast portion of enterprise tasks. 

However, IT companies have repeatedly said AI will expand their total addressable market, pegged at about $300-400 billion, and a lot of it will be from modernisation and orchestration of legacy systems that cannot be made AI-ready just by putting the technology on top of it. 

“The AI revolution has made legacy modernisation urgent in a way nothing else has, and clients are moving to retire the technical debt accumulated over decades. The preference will be to build versus buy for software. All this creates even larger opportunities for us,” Nilekani explained to shareholders virtually. 

The virtual AGM, which was attended by 326 members, saw questions peppered from shareholders ranging from the growth plan till 2030 and requests to visit the company’s training facility in Mysuru to the threats AI possess to services companies and why the shares of Infosys are tanking. 

Infosys chief executive officer Salil Parekh said while macroeconomic environment has impacted clients' discretionary spending, the company is banking on the AI services area. Currently, AI revenue if about 5.5 percent, or $1 billion for Infosys with the company working on 4,800 AI projects and having built 600 agents. 

The defining opportunity lies in integrating intelligent AI systems with mission-critical enterprise platforms. The greatest value will come from combining the world of models and agents with traditional transaction systems that continue to underpin enterprise operations. That convergence is where the next wave of opportunities is expected to emerge. 

Nilekani had mentioned in the company’s annual report that the hardest variable in enterprise AI is not the technology but the context. “Every company has a different legacy, different data, and different undocumented dependencies. Modernising brownfield systems is far harder than greenfield development. Enterprise AI faces the same truth.” Infosys already works with 90 per cent of its top 200 clients in their AI adoption.