AI is Eating Away at Indian IT's Old Business. Can it Rewrite Enterprise Playbook?

Faced with slowing growth in their core outsourcing businesses and the prospect of AI automating much of the work they traditionally sold, India's top IT services companies are racing to reinvent themselves.

From building proprietary AI platforms to signing alliances with OpenAI, Mistral, Anthropic, Microsoft, and Google, firms including TCS, Infosys, HCLTech, and Wipro are aggressively repositioning themselves as enterprise AI partners rather than providers of labour-intensive technology services.

IT firms have been busy rolling out AI products and finding new partners in global AI pioneers. 

India’s IT bellwether TCS recently partnered with French AI startup Mistral to develop and deploy custom AI systems for enterprises. Wipro has expanded its alliance with ServiceNow to help clients roll out agentic AI workflows. HCLTech unveiled an autonomous finance platform built on Google Cloud's Gemini stack. Mphasis launched Tria, an enterprise AI platform designed to move companies beyond AI pilots and into automated decision-making at scale.

Taken together, these moves reveal that India's $300 billion technology services industry is in the middle of a structural reinvention, as the old model of selling labour-intensive IT services priced per headcount or per hour is under existential pressure.

The question animating boardrooms, investor calls, and analyst reports is whether the pivot to enterprise AI can happen fast enough, and at sufficient scale, to compensate for the slowdown in the businesses that have historically paid the bills.

“Historically, Indian IT firms have been built around a technology services model. The AI era may require them to evolve towards delivering enterprise AI applications and outcome-oriented solutions, which involves changes not only in technology capabilities but also in operating models, talent structures, commercial frameworks, and go-to-market approaches,” Gaurav Vasu, Founder and CEO of business research platform UnearthInsights, tells AIM.

AI-led offerings currently contribute only a small proportion of overall IT revenues. While partnerships with players such as Mistral, OpenAI, Anthropic, and cloud providers are accelerating, they have not yet reached a scale sufficient to materially offset broader pressures on traditional services revenues.

The Platform Race

At the heart of the sector's response is a race to build and own enterprise AI platforms—composable stacks of models, agents, data infrastructure, and workflows that can sit within a client's technology environment and orchestrate intelligent automation.

Infosys launched its Topaz Fabric platform in November 2025, describing it as a composable stack of AI agents, services, and models designed to unify IT service delivery across the enterprise. The company followed this up in January 2026 with a collaboration with Cognition, maker of the AI software engineer Devin.

Wipro, which pledged $1 billion over three years to advance AI through its ai360 initiative, launched its Wipro Intelligence platform suite in late 2025. Tech Mahindra launched TechM Orion in July 2025, and LTM also took a similar path with its BlueVerse platform, an AI-native ecosystem built around intelligent agents and modular architecture.

These proprietary platforms are complemented by a flurry of agreements with the major AI providers and hyperscalers.

The objective is to become the layer that helps enterprises deploy, manage, and govern AI systems. Whoever owns that layer stands to capture a larger share of AI spending than firms that simply provide implementation services.

The Logic of the Bet

There are twin reasons behind the enterprise AI push.

On the defensive side, the traditional IT services model—build and run large application estates, staff augmentation, business process outsourcing—is being hollowed out by the same AI tools that Indian IT firms are now trying to sell. If Indian IT firms do not own a share of that automation stack, they risk being disintermediated by the AI platforms themselves.

On the opportunity side, enterprises globally are spending heavily on AI transformation, and they need implementation partners who understand their industries, regulatory environments, and technology estates. Indian IT firms, with decades of experience running complex enterprise systems for global clients, are well-positioned to play that role, but only if they can credibly demonstrate AI capability alongside domain expertise.

"Every corporate is going to talk about it, and services organisations absolutely need to infuse that in everything they do. Whatever offerings they have will need to be powered by AI, and that will happen to different degrees. If you don't have the capability, you will join hands with a frontier AI organisation and do it jointly, or you will invest in creating your own assets, accelerators, and platforms," says Siddhartha Tipnis, Partner and Technology Sector Leader at Deloitte India.

The strategic logic of the enterprise AI push is hard to argue with. The harder question is one of maturity and scale.

"Partnerships with AI providers, hyperscalers, and model developers are strategically important for Indian IT services companies, but they are still at a relatively early stage of maturity," cautions Vasu.

The Partner-Competitor Problem

The AI partnerships are further complicated when the platforms themselves simultaneously develop their own enterprise implementation capabilities.

In May, OpenAI launched what it called the OpenAI Deployment Company—a $4 billion venture backed by TPG, Brookfield, and Bain Capital, designed to embed ‘forward deployed engineers’ directly inside corporations. Also,Anthropic launched its Enterprise AI Services initiative, launched in partnership with institutions including Blackstone, Hellman & Friedman, and Goldman Sachs. Under this model, Anthropic's Applied AI engineers work directly with enterprise customers to identify use cases, build solutions, and deploy Claude-based applications. 

This work sits squarely in the domain traditionally occupied by systems integrators and IT services firms.

However, this doesn’t mean that the current wave of AI investment is misguided. On the contrary, for Indian IT firms, building credible enterprise AI capabilities is essential to remain relevant to large clients. 

What investors and clients are both watching is execution—whether the platforms, partnerships, and proprietary offerings announced over the past eighteen months can be converted into repeatable, scalable revenue streams. The sector has shown it can build compelling AI narratives. The harder test is whether it can convert those narratives into durable growth.