Infosys chairman Nandan Nilekani projects a $300-$400 billion market for AI-led services by 2030. Currently, AI services contribute 5.5% to the company's revenue, with active projects across 90% of its largest clients. The strategy focuses on updating old IT systems and integrating AI into core business platforms.
What Happened
Infosys chairman Nandan Nilekani has outlined the company’s focus on the artificial intelligence (AI) services market, identifying an opportunity worth $300-$400 billion by 2030. Speaking to shareholders at the company’s 45th annual general meeting on Tuesday, Nilekani emphasized that AI is not a threat to IT services but a catalyst that will increase demand for modernizing older technology systems. The company is positioning its AI-first strategy to help large businesses integrate advanced AI models with their existing, critical operations.
Revenue And Growth Picture
The company’s push into AI is already showing up in its financial performance. Chief executive Salil Parekh confirmed that AI-related services now account for 5.5% of Infosys's total revenue. This reflects an annualized revenue run rate of approximately $1 billion. With AI initiatives currently underway for 90% of its top 200 clients, the company is using platforms like Topaz and Fabric to scale these deployments. These services range from AI strategy and engineering to data management and security.
How The Industry Is Reacting
Infosys is not alone in this pursuit. Major Indian IT peers, including TCS and HCLTech, are also heavily investing in GenAI to secure market share. The entire sector is currently pivoting to prove that AI can move beyond experiments into actual revenue-generating projects for clients. For investors, the key test for Infosys and its peers will be how quickly these projects move from pilot testing to full-scale, long-term contracts.
The Business Reality Check
While the market opportunity is large, shifting focus toward AI comes with challenges. A primary risk for the IT sector is whether AI-led services will genuinely grow the pie or simply replace existing revenue streams—a concept often called cannibalization. If AI tools make coding and software maintenance faster and cheaper, IT companies might need to lower their service prices to stay competitive, which could pressure profit margins.
Additionally, high-quality AI deployment requires significant upfront investment in data infrastructure and talent. If client spending on technology slows down due to global economic uncertainty, companies could delay these large-scale AI upgrades, affecting the project timelines that Infosys is aiming for.
What Investors Should Track
Investors monitoring this shift should look for a few specific indicators in upcoming quarters. First, watch for the growth rate of the AI revenue segment to see if it sustains momentum beyond the current 5.5% share. Second, keep an eye on management commentary regarding profit margins; if heavy spending on AI development impacts profitability, it may be a concern. Finally, track whether the company provides details on the conversion rate of AI pilots into large, multi-year contracts, as this will determine the true long-term value of these initiatives.