Infosys CEO Salil Parekh on AI tools replacing engineers: It is not that overnight everything is going to be replaced as in large companies ...

Software engineers can heave a sigh of relief. Your job may get changed/altered a bit, but it is not going anywhere according to the CEO of India's second-biggest IT company Infosys. In an interview to Economic Times, Infosys CEO Salil Parekh spoke about a range of issues including the impact of AI tools on the core business of IT services companies like Infosys. Asked specifically on what he thinks of the view that the IT services industry is going to be decimated by AI tools in next five years. Infosys CEO said, " If you look at the size of tech services, it’s $1.5 trillion in overall global market size. Our analysis is that the AI services market is $300-400 billion. Going by this, it therefore stands to reason that far from getting decimated, the Indian IT industry will be thriving in 2030. Infosys will leverage those six areas of growth, and we’ll see that we get revenues from these six areas of growth."

On the impact of Agentic AI tools on companies like Infosys, Parekh said, "Whenever a technology comes in, it is a brownfield area—somewhat old and new. Greenfield is when something is entirely new. What is likely to happen with these technologies is that we need to coexist with everything because it is not that overnight everything is going to be replaced. The foundational models are very ahead in terms of innovation. But dispersion within a large enterprise is slower. That is where our engineering is needed to make sure it works within your organisation."

Business environment in the US improving

Parekh said that the business environment looks a lot more positive, especially in the US. "The macro at this stage is looking better than it was 12 months ago. At least in the US market, they have reduced the regulations quite significantly. There's at least some talk that interest rates may further come down. When we talk to people, the sense we get is that they feel the business environment is more supportive," he said.

Parekh talked about Infosys hiring from campuses in the past year when asked about the future of work considering that IT services in India are known to employ a significant part of the country's middle class. "Look at the data. This year, through March, we will end up recruiting 20,000 college graduates in India. We’ve already had 18,000 at the end of Q3. That’s just the college graduates. We’ve already announced that we will recruit 20,000 college graduates next year. What tends to happen is that some of these projects will require more people over time. Yes, they will also use agents, but the overall size will still be larger. If you assume the IT spend, or work is the same, then there is more of this view (of job losses). To have more headcount is still more positive than negative. What we see is some of the skills that the individuals will have, even as they enter the workforce or over time, will give them more specialisation," he said.

On criticism about how the Indian IT services industry has not given back enough to the startup ecosystem, Parekh said, "Infosys has an innovation fund in which we actually invest a lot. We could always do more, but the startup ecosystem focus is very broad, whereas Infosys has a narrow focus, to work with its global clients. Wherever there is an overlap, there's a tremendous amount of work going on. We've made some investments in data analytics work, healthcare work and so on."

On Infosys' AI strategy, CEO Parekh said, "We are building agents for clients using the foundational models. At the AI day, we had about 10 or 12 client examples that were shown. These weren’t pilots but large-scale projects. There is significant activity in this space, and clients want to work with a trusted partner who can guide them. That is a major component of our AI strategy. Another is a process where, if you have a customer service process (we help) you change the process using agents and, reducing the time, increase the quality and so on. Then we have legacy modernisation, since there are a lot of companies where technology is old. So, to me, there’s a huge opportunity out there that we see in AI services."