Indian IT Was Supposed To Die From AI. Instead It's Billing for the Cleanup. (indiadispatch.com) 40
Two years after generative AI was supposed to render India's $250 billion IT services industry obsolete, the sector is finding that enterprises still need someone to handle the unglamorous plumbing work that large-scale AI deployment demands. Less than 15% of organizations are meaningfully deploying the new technology, according to investment bank UBS, and Indian IT firms are positioning themselves to capture the preparatory work -- data cleanup, cloud migration, system integration -- that channel checks suggest could take two to three years before enterprise-wide AI becomes feasible.
The financials have held up better than the doomsday predictions suggested. Infosys now calls AI-led volume opportunities a bigger tailwind than the deflation threat, a reversal from 2024, and orderbooks held steady in the third quarter even as pricing pressure filtered through renewals. Infosys expects its orderbook to grow more than 50% this quarter, anchored by an NHS deal worth $1.6 billion over 15 years.
The companies have been restructuring accordingly. TCS cut headcount by 2% and invested in a 1GW data-centre network while acquiring Salesforce advisory firm Coastal Cloud. HCLTech reduced margins by 100 basis points and became one of the first large systems integrators to partner with OpenAI; this week it announced acquisitions of Jaspersoft for $240 million and Belgian firm Wobby to expand agentic AI capabilities.
The bear case for the Indian IT sector assumed that AI would work out of the box. Two years in, it does not.
The financials have held up better than the doomsday predictions suggested. Infosys now calls AI-led volume opportunities a bigger tailwind than the deflation threat, a reversal from 2024, and orderbooks held steady in the third quarter even as pricing pressure filtered through renewals. Infosys expects its orderbook to grow more than 50% this quarter, anchored by an NHS deal worth $1.6 billion over 15 years.
The companies have been restructuring accordingly. TCS cut headcount by 2% and invested in a 1GW data-centre network while acquiring Salesforce advisory firm Coastal Cloud. HCLTech reduced margins by 100 basis points and became one of the first large systems integrators to partner with OpenAI; this week it announced acquisitions of Jaspersoft for $240 million and Belgian firm Wobby to expand agentic AI capabilities.
The bear case for the Indian IT sector assumed that AI would work out of the box. Two years in, it does not.
Funny! (Score:5, Insightful)
Re:Funny! (Score:5, Insightful)
Re: (Score:2)
How is this a low bar?
Those who always argue (erroneously) that AI functions like the human brain should be intensely comfortable with the idea that Indian IT personnel are de-facto competing AI agents.
So the question becomes: does a single AI (replicated a million times) perform as well as a million AIs (each idiosyncratic, and able to cooperate).
Those who understand diversification and single points of failure should have no difficulty answering that que
Re: (Score:3)
While funny, that is actually an excellent point. If "AI" cannot even match what is possibly the lowest bar (besides attack code, that one does not need to work reliably), and do so 2 years in, then that is a proof of incapability about as strong as possible. And no, there will not be any major improvements in the next few years. Scaling up models already has delivered next to nothing. Better training is infeasible outside of very narrow areas. What LLM-type AI does now is what it will essentially be capabl
Re: Funny! (Score:1)
Re: (Score:2)
Re: (Score:2)
They are mostly doing more because safety, security and reliability get thrown out the window in a desperate attempt to keep the hype going.
Re: (Score:2)
You AdHominem is invalid, as they all are. Just shows your mental limitations nicely. Yes, AI "Agents" can do a lot more, including getting hacked in multiple ways and deleting your software project. Great accomplishments! What I have is exactly a realistic vision on things. Mindless positivity, on the other hand, is only going to cause problems. In this case probably a decade or two of economic slump.
Really? (Score:3)
Ok, that was a bad prediction for... whoever predicted that.
Re:Really? (Score:5, Funny)
They sold their shares, moved to Hawaii and will never care about your opinion (or that of anyone else in the computing industry).
Re: (Score:2)
Chaos is job security (Score:2)
...for chaos cleaners.
NHS and IT in same sentence (Score:2)
Teeth gnashing...1.5B? Make that 12B...
Grading their own homework (Score:3)
People who made the mess, cleaning the mess, and charging for it.
Re: (Score:3)
Indian IT didn't make this mess. But they've spent enough time walking behind their sacred cows that they recognize what's coming. And they are ready to do the needful.
Wachu talking 'bout? (Score:5, Insightful)
This mess was brought to you by the big money boys who dream of ordering robot slaves around and dispensing with those nasty humans with their own minds and desires and plans.
This is Nadella, Pichai, Zuckerbook, along with Musk, Andreesen and the rest of the Valley Nazi clowns.
Re: (Score:2)
They can today! [youtube.com] Well, technically, it's still a human hidden in a cupboard remotely controlling the robot, but at least when the ironing is not done properly the enraged customer can shove the robot against the wall and rip its arms out. I believe that's included in the normal wear and tear policy. I could be wrong about that.
Re: (Score:2)
Not the only area where that business model is in use.
Are you tired of Winning yet? (Score:2, Funny)
This is a total disaster.
Re: (Score:2)
As long as enough people do not get it, there is MONEY to be made! Also see, for example, crapto, Quantum "Computing", VR, and some others. Bad ideas that refuse to die because of enough clueless people with money.
Your entire IT running on flaky infrastructure. (Score:5, Funny)
You also need a “hybrid cloud” solution. That’s where you put back the hardware you removed while moving to the “cloud” and pay a yearly rent to the “cloud” provider. Then your “cloud” provider installs an edge node at the ISP to reduce latency. All costs passed on to you. And we haven’t even gotten to designing and implementing the “cloud” solution for your business.
AI (Score:5, Insightful)
The hope was that AI would replace shitty Indian IT, but instead companies are laying off Americans and hoping to do more engineering in India. Often led by Indian management pushes.
Indian IT was supposed to... (Score:3)
and the cycle continues (Score:2)
Great, and then after the Indians botch it all to hell companies will have to look to us natives to ACTUALLY fix it.
cool, I guess...but I've seen this show before and it sucked the first time around.
Something didn't immediately happen (Score:3, Insightful)
You're spending trillions to build out AI. And it's you that's spending it because when it's done the banks that loaned the money will collapse in the chaos as winners and losers shake out and you will have to bail out those Banks or they will take your job and your house and everything with it in the resulting chaos.
We are basically doing a moonshot to replace white collar workers once and for all. This is on top of 45 years of non-stop automation for Blue collar work.
Billionaires do not like capitalism. They do not like being dependent on you as a consumer. They have come up with a solution now and it's to get rid of consumers and get rid of capitalism.
And for some reason a little less than half the country is happy to help them do it
Re: Something didn't immediately happen (Score:2)
As expected (Score:3)
Hypemongers and lying salesweasels convince clueless executives to deploy immature tech with predictable results.
Future AI may do some of the stuff promised by the hypemongers, but today's AI should be used in closely monitored experiments, far from production systems
Step 3...hiring western developers (Score:5, Funny)
to clean up the mess made by Indian IT firms trying to clean up the AI mess.
Don't get me wrong, there are some talented developers from India, they just don't work for the IT outsourcing companies.
If there was EVER a perfect setup for this.... (Score:2)
Step 1: Hire Indian IT firm, who writes messy code.
Step 2: Have AI clean up the Indian IT firms' messy code.
Step 3: Hire western developers to clean up the mess made by Indian IT firms trying to clean up the AI mess.
Step 4: ???
Step 5: PROFIT!!!
Re: (Score:2)
The current administration is doing what they can to improve India's tech corps... the talented people will no longer be able to come to work in the US and will instead stay at home.
Re: (Score:2)
What I have learned is that it's not India vs. US. It's India outsourcing companies vs. developers hired as employees.
My company has a team of excellent developers in Pakistan. The difference is, these Pakistanis work directly for a subsidiary of my company, not through an outsourcing firm. They are truly part of our company. My previous company did the same in India, with similar results. Employees of high quality and talent, who stay with the company for a long time. Many of them are capable leaders.
Outso
AI? I'm Still Waiting for the Cloud... (Score:4, Funny)
Just another thing hat will crash (Score:2)
"AI mess cleanup" seems to be really good business these days. But as soon as the whole insanity collapses, these people may be looking for a job as well. Unless they can pivot from fixing code to writing code. Which I sort-of doubt with the generally bad coder competence found in Indian outsourcing. (Not, I am not being racist. I just know that good coders in India leave the county or do other things than these generic services. Explained to me by two guest students from India.) Same for sysadmin services.
Cleanup? (Score:2)
... enterprises still need someone to handle the unglamorous plumbing work that large-scale AI deployment demands.
I have to wonder: how much of that "plumbing work" is in fact humans pretending to be AI? Maybe Indian IT staff are better at doing AI's job than AI itself currently is.
Who even came up with this premise? (Score:3)
Currently most companies make little to no use of AI except at an individual level.
Even my large scale AI-related projects aren't really replacing anyone yet. Maybe in 5-10 years if the AI companies aren't all out of business due to their massive fat debt loads.
Some companies seem to be interesting in shedding employees and not hiring new employees, but they are just shooting themselves in the foot. (It's not that AI doesn't work or isn't helpful, but it just doesn't really replace anyone at this point.)
is it still cheaper to raise billions in ai (Score:2)
It was supposed? (Score:2)
Who says it was supposed to render the industry obsolete? People keep claiming such things, but most of those predictions were just fearmongering.