Infosys co-founder Nandan Nilekani argued at the NCAER India Policy Forum 2026 that India's strength lies in building AI applications rather than competing in chip manufacturing. He envisions India becoming the global 'AI use-case capital' by leveraging its digital infrastructure. For investors, the commentary highlights the ongoing shift in the IT services sector, where companies are pivoting toward AI-led growth while navigating significant execution risks.
Nandan Nilekani, co-founder of Infosys, has outlined a distinct vision for India’s role in the global artificial intelligence landscape. Speaking at the NCAER India Policy Forum 2026, he argued that India’s competitive advantage is not in manufacturing advanced chips or hardware, but in developing and deploying practical AI applications at a massive scale.
Nilekani believes that hardware and basic infrastructure will eventually become standard commodities. Instead, he sees the real value emerging at the application layer—the tools and services that people and businesses actually use. By utilizing India’s existing Digital Public Infrastructure, he suggested the country is well-positioned to become a global leader in AI use cases.
A core part of this strategy involves making AI accessible through local languages and voice interfaces. For AI to serve the broader population, it must be able to understand the linguistic diversity of India, including the way people mix languages in daily conversation. Moving away from an English-only model is, in his view, a necessary step for mass adoption.
The discussion also touched upon the future of employment. Nilekani proposed that startups and entrepreneurship will be the primary drivers of job growth over the next decade. He contrasted this with large, established companies, which he believes might be more vulnerable to automation and structural changes. This outlook suggests a shift toward a model of many smaller, agile businesses rather than a reliance on a few massive employers.
For investors, these comments offer insight into how large IT services firms are navigating the AI transition. Major players in the Indian IT sector have positioned AI as an amplifier for their existing services, viewing it as a significant opportunity to grow market share. However, this transition is not without challenges. Market observers have frequently highlighted the execution risk involved in moving from traditional IT service contracts to complex, AI-first projects.
There is also ongoing market concern regarding how AI might disrupt the traditional IT services business model. While management teams across the sector remain optimistic about targeting multibillion-dollar AI opportunities by 2030, the ability to successfully implement these technologies without eroding profit margins remains a key monitorable. As the sector evolves, investors may continue to track project timelines, adoption rates of AI tools, and the ability of companies to adapt their workforce to these changing industry demands.