Ramesh Damani Sees Ominous Signs For Indian IT as Anthropic Drives AI Shift
Damani cautions that AI advancements could disrupt Indian IT firms' core model, urging adaptation before it's too late.
Veteran Market Investor Ramesh Damani has warned of challenging times ahead for India’s information technology sector, saying the rapid rise of artificial intelligence players such as Anthropic signals a structural shift that traditional IT services companies may struggle to navigate. His remarks come amid growing investor excitement around generative AI and its potential to disrupt established outsourcing models.
Speaking on recent market trends, Damani said the “ship has sailed” for Indian IT firms when it comes to fully capitalising on the current AI wave. He argued that the sector’s business model, built largely on cost arbitrage, large workforces and incremental digital transformation projects, may not be well suited to an era defined by automation and AI-driven productivity gains.
Damani pointed to the global buzz around companies like Anthropic and OpenAI as evidence that value creation in technology is increasingly shifting towards product-led, research-heavy firms rather than services-driven players. According to him, clients adopting advanced AI tools could eventually require fewer engineers and shorter project timelines, directly impacting revenue visibility for large IT service providers.
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The comments come at a time when Indian IT stocks have already been under pressure due to weak global demand, cautious client spending and delays in large deal decision-making. While major IT firms have announced investments in AI capabilities and partnerships with global tech players, analysts remain divided on how quickly these initiatives can translate into meaningful growth.
Some industry experts caution against writing off the sector entirely, noting that Indian IT companies still enjoy strong client relationships, scale advantages and deep domain expertise. They argue that while AI may reduce certain types of work, it could also create new opportunities in integration, governance, cybersecurity and enterprise adoption.
However, Damani’s assessment reflects a broader concern among investors that the current AI boom may disproportionately benefit a small group of global technology leaders. As markets continue to reassess valuations, his remarks underline the uncertainty facing Indian IT firms as they attempt to adapt to a rapidly evolving technological and competitive landscape.
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