Generative AI models such as ChatGPT will slow down market-share gains and deflate pricing for Indian IT companies in the short term, analysts at J.P.Morgan said on Friday.
As generative AI is implemented more broadly, consulting firms such as Accenture and Deloitte will gain market share over Indian IT firms such as Infosys Ltd. and Wipro Ltd. in the near term, analysts at the brokerage wrote in a note to clients.
Generative AI can be a "deflation driver" in the near term on legacy services as they compete on pricing, necessitate staff retraining and drive loss of competitiveness, they added.
"ChatGPT is likely to deflate legacy services the most and application services the least."
Artificial intelligence company OpenAI's chatbot has dazzled amateurs and industry experts with its ability to spit out haikus, debug code and answer questions while imitating human speech, helping it attract a $10 billion investment from Microsoft Inc. earlier this month.
Since then, other large tech companies like Alphabet Inc and China's Baidu Inc have rushed to announce their own in-house developments of generative AI.
JPM said that among Indian IT companies, Infosys and Tata Consultancy Services might retrain staff faster than smaller peers due to their better graduate hiring and training infrastructure.
