New Delhi, February 14 (IANS). Artificial intelligence (AI) is unlikely to replace IT services companies any time soon, according to a new report from JPMorgan’s Asia Pacific equity research team.
Instead of shrinking the IT industry, AI will help companies do more with the same budget.
In its report, JP Morgan said that AI can destroy IT companies. This fear has been greatly exaggerated.
The report said that AI will not reduce opportunities for IT companies, but will create opportunities in new areas.
The brokerage firm compared AI to earlier technological changes such as offshore labor, enterprise software and cloud computing.
In all these cycles, new technology did not eliminate IT services, but rather changed the way companies worked.
According to the report, AI will also play a similar role, helping companies handle more projects without increasing the budget.
JPMorgan said demand is growing in areas such as modernizing legacy legacy systems, rewriting customized SaaS applications as needed, building AI agents for operations, ensuring trust and reliability in AI systems, and integrating physical AI solutions. The report also said that all these areas will require strong IT service support.
The report also notes that enterprise technology teams are often underfunded compared to business expectations.
In such a scenario, AI is likely to be used to enhance productivity rather than completely replace IT companies.
The brokerage firm warned that it is too simplistic to assume that AI can automatically create enterprise-grade software and replace the integration and customization tasks performed by IT companies, but this is unlikely.
The report views IT firms as the “plumbers of the tech world”, underscoring the vital role they play in keeping complex systems running smoothly in large organisations.
According to the report, recent market weakness in IT stocks reflects investors’ concerns that rapid advances in AI could slow revenue growth and reduce the overall potential market for Indian IT companies.
–IANS
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