Infosys CEO Salil Parekh has cautioned that the rapid, high-cost build-out of AI infrastructure faces risks from technological obsolescence. Despite these concerns, Infosys shares rose about 4% on October 13, 2026, as investors assessed the company's asset-light approach to AI adoption.
Infosys CEO Salil Parekh has flagged potential risks associated with the massive global spending on artificial intelligence infrastructure. During recent industry discussions, Parekh highlighted concerns that the aggressive investment in data centers and specialized chips might face challenges regarding long-term returns. The core issue, according to the CEO, is the pace of technological change: infrastructure being built today could become obsolete much faster than expected, making it difficult for companies to recover their massive capital spending.
This warning comes as many technology giants and cloud providers are pouring billions into AI capacity. However, Infosys is distancing itself from this capital-intensive model. The company has maintained an asset-light strategy, choosing not to compete in the race to build physical data centers. Instead, the firm is focusing on helping clients navigate the complex task of adopting AI without unnecessary, high-cost hardware investments.
Corporate clients are also shifting their behavior, which supports the company's cautious outlook. Many businesses are now prioritizing cost-effective AI solutions over the most powerful and expensive foundation models. By opting for smaller, more efficient models that meet specific operational needs, companies are aiming to avoid the high costs associated with massive infrastructure footprints. This shift suggests that the demand for the most resource-heavy AI compute may not grow as linearly as some earlier industry projections assumed.
Despite the CEO's cautionary remarks on industry trends, the market reacted positively. Infosys shares traded up by approximately 4% on October 13, 2026, tracking a broader recovery in the Nifty IT index. This market enthusiasm reflects a potential investor preference for the company's disciplined, asset-light approach. In its recent Q1 FY27 financial results, Infosys reported resilient operating margins of 21.1%, signaling that the company is effectively managing profitability even as it expands its AI-related service offerings.
For investors, the key monitorable remains how the company balances its service-led AI strategy with the evolving demands of corporate clients. While the massive infrastructure build-out by other players creates industry-wide uncertainty, Infosys’s focus on software and consulting services helps it avoid direct exposure to the risks of depreciating hardware. Looking ahead, stakeholders will likely track how sustained cost-consciousness among enterprises influences future revenue from AI-related consulting and implementation projects.