A report from analysis at JP Morgan projecting damage to India's large consultants and system integrators is roiling around the country and causing concern. The report says ChatGPT and the expected generative AI services to come from other companies has the potential to “deflate legacy services” from companies such as Wipro and Infosys. US-based companies such as Deloitte and Accenture will benefit from this impact and gain market share, the report says.

The concern in India is palpable, with the India Times, as one example, pointing out the present weaknesses of AI in general and ChatGPT in particular. The India Times report says that adapting generative AI for local conditions “is not easy” and subject to “spewing out wrong information.” The article also warns of “crucial peculiarities that (generative AI bots) may not be aware of, and thus may end up giving wrong answers or imperfect end products.”

India's IT Business Under Pressure
India has built a robust IT consulting sector over the past two decades, with at least Five multi-billion-dollar companies – Tata, Wipro, Infosys, Tech Mahindra, and HCL. Its overall economy remains in the Frontier Markets income tier of nations, according to IDCA Research. Employment in India's overall IT sector is the third largest in the world. IDCA Research shows, however, that India's IT employment is less than half of China's as a percentage of population, and lags the US by 90% in this measure.

A potential threat to this important economic sector, as the one outlined in the JP Morgan report, will thus be taken very seriously by India's tech and government leaders.

Photograph of Pune office from Infosys.