AI Transforming IT Services Industry

Wipro’s Chief Executive Officer, Srini Pallia, has shared a positive outlook on the IT services industry, highlighting a considerable increase in demand driven by AI.

Shifting Industry Landscape

Speaking at the World Economic Forum (WEF) in Davos, Pallia stated that the sector is experiencing a crucial transformation. While 2025 was focused on experimentation and limited trials, 2026 is shaping up to be the year of accountability and comprehensive execution.

Focus on Deployment

As per Pallia, organisations are no longer merely exploring AI capabilities. They are advancing from minor proof-of-concept (PoC) initiatives to extensive, enterprise-wide applications. This advancement is generating a solid pipeline of fresh contracts for Indian software exporters, who are vying for a combination of large-scale deals and more niche AI projects.

Pallia noted that the year 2025 was primarily dedicated to implementing AI, PoCs, and recognising productivity benefits. This is rapidly evolving in 2026, as executives and board members are increasingly demanding clarity on return on investment.

Economic Transformation Through AI

The Wipro executive recognised that AI is reshaping the financial dynamics of the IT industry. It is anticipated that AI-assisted software development will lower coding and testing expenses by approximately 25%. While this may exert pricing pressures, Pallia believes it will ultimately result in a greater volume of work, with clients leveraging savings to sponsor additional digital transformation initiatives.

“AI-assisted software development will be around 25% cheaper, yielding notable gains in coding and testing,” he stated. This will pave the way for new projects, reinforcing the idea that IT budgets are not expected to decline in the foreseeable future.

Wipro’s Commitment to AI

Despite challenging times in recent years, characterised by global companies reducing technology investments amid economic instability, Wipro perceives the current trend towards AI as a stabilising force.

The firm previously allocated $1 billion in 2023 to enhance its AI capabilities and is directing its efforts towards “agentic AI” and consulting-oriented services to assist international clients in modernising their core systems.