Indian IT vs ChatGPT: JPMorgan lists out why top firms TCS, Infosys may benefit from AI boom

Generative AI models such as ChatGPT can potentially simplify coding and democratize access to a wider pool of talent, driving a new source of disruption, which can have a combination of headwinds and tailwinds for IT Services firms, as per JP Morgan. 

“We see key positives including a boost to productivity, widened employability, driving down costs and creating a new area for change management projects. Challenges come from a fresh new deflationary driver in managed services projects, and the need for retraining staff made redundant,” the note stated. 

Developed by US-based startup OpenAI, ChatGPT produces essays, poems and programming code within seconds. Earlier this month, Microsoft Corp said that it will be making a $10 billion investment over several years in OpenAI. 

Any tech change likely favours consulting heritage firms and digital native firms over tech heritage firms such as Indian Techs in the short term and firms with stronger graduate training infra such as Indian IT companies Infosys and TCS are likely to weather this better. JPM thinks that over time this could be a source of disruption, similar to an early stage of DX over 2015-2019, that slows down share gains and deflates pricing before India Techs reorient themselves.

Winners and losers? 

ChatGPT is likely to deflate legacy services the most and application services the least. Consulting heritage firms like Accenture and Deloitte and digital native firms are likely to gain share over Indian Techs in near term with such changes. Among Indian Techs, those with stronger graduate hiring and training infrastructure such as Infosys and TCS are likely to retrain staff faster than smaller peers,” JP Morgan added.

ChatGPT and other forms of generative AI programs are likely to make code writing easier, driving a lot more reuse, in the global brokerage’s view. This would likely need validation by an experienced programmer but cut down effort, added analysts.

“Generative AI can be a productivity booster, bringing down costs that can be retained by vendors early in the cycle with less mature clients. This can also eventually create a new area of work for firms in implementing this tech on enterprise technology stacks.


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