Wrong to think that AI will eliminate IT services: Nasscom prez

While artificial intelligence (AI) advancements represent a new generation of productivity in software development, concerns that these tools will disrupt or eliminate technology services are “strongly wrong”, said Rajesh Nambiar, president of industry body Nasscom.

“Large enterprises are the primary clientele for IT companies, and they understand the enterprise context in which these systems operate,” he told ET.

He referred to the complexity of the enterprise technology landscape, which involves legacy systems with swathes of fragmented databases, cybersecurity and regulatory requirements, among others.


“Concerns that such tools, whether it is Claude Cowork or something else, will eliminate technology services are strongly wrong,” Nambiar said.

Also Read: Claude Cowork’s debut signals start of enterprise automation

Stock market investors have wiped out nearly $50 billion from Indian IT companies’ market capitalisation since the start of 2025, spooked by fears of AI tools eating into the IT sector’s revenue. Analysts estimate tools such as Anthropic’s Cowork plugins and Palantir’s ERP software will have a 2% hit on revenue growth each year for the next three-four years.

Nambiar, however, believes the $283 billion industry will be able to catch up.

“Services firms played the role of systems integrators in the ERP (enterprise resource planning) era. Now, they have to play the role of an AI orchestration partner. There will always be an efficiency play coming from Agentic AI. There’s no question. But if they can make that pivot, I don’t see much risk,” he said.

The Nasscom president pointed to the IT services industry’s value derived from domain or enterprise knowledge, which stands to get enhanced as AI tools gain traction.

“Tech adoption among enterprises is moving from experimentation to large-scale deployment. When they do, service companies will play a critical role in making sure that they can help these companies make the transition,” Nambiar said.

Companies that have invested in platforms and people, and have got the right partnerships with global corporations, hyperscalers and the right assets acquired through mergers and acquisitions, are better placed than others, he said, adding that India’s edge in talent availability is a huge factor.

The tech industry body is gearing up to release its yearly strategic review during its Technology and Leadership Forum later in February.

The Nasscom president also sought to allay fears around hiccups with the United States’ H-1B interviews having any major impact on the US-focused IT industry.

“It's not the most ideal situation, but at the same time, most IT organisations at this point have enough capacity developed locally that they can leverage all that. They will also participate in a limited way that makes sense for them,” Nambiar said.