Infosys Chairman Says AI Will Create More IT Services Work, Not Less, Despite Deflation Fears

Infosys chairman Nandan M. Nilekani told shareholders on Tuesday that AI will generate more work for IT services companies, not less, even as the industry braces for revenue deflation from automated coding tools. Speaking at the company's annual general meeting, Nilekani acknowledged the existential question facing his industry: if coding becomes automated, why are services firms needed at all?

Nilekani argued that enterprise context, rigorous testing, resilient architecture, and foundational cybersecurity remain beyond the reach of current AI. He pointed to legacy modernization as a specific growth driver, saying AI has made rewriting decades-old code urgent in a way nothing else has. Infosys and other Indian services giants recently warned that AI deflation could shrink services revenue as clients use AI tools to do more work in-house.

Former CEO Launches Rival AI Startup

The same week, former Infosys CEO Vishal Sikka launched Hang Ten Systems with a $32 million seed round led by Mayfield and Aramco Ventures. The startup aims to help enterprises use AI to run software at lower cost, directly challenging the traditional IT services model Sikka once led. Hang Ten brings together veterans from SAP, Infosys, and VianAI.

• Nilekani said AI will make legacy modernization urgent, creating demand for custom replacements over packaged software.
• Infosys has signed a deal with Anthropic to integrate its models into client workflows.
• Hang Ten Systems targets the same enterprise customers Infosys serves, but with an AI-first cost reduction pitch.
• Industry analysts have warned that AI coding tools could reduce the volume of billable work for services firms by 20-30% over three years.

Two Visions for IT Services in the AI Era

Nilekani's optimism contrasts with the deflation warnings from Infosys and peers like Tata Consultancy Services and Wipro. In recent earnings calls, executives cited AI tools as a factor in declining project sizes and shorter engagement durations. Nilekani acknowledged the doubts but insisted that integrating AI agents with mission-critical transaction systems will create a new wave of opportunities.

Hang Ten Systems represents a direct bet that the traditional services model is ripe for disruption. Sikka, who left Infosys in 2017 after a boardroom dispute, is now raising capital to automate the very tasks Infosys bills for. The coming months will test whether Nilekani's vision of AI as a demand multiplier holds, or whether Sikka's startup accelerates the deflation that services firms fear.