Infosys expects artificial intelligence services to grow from over 8% of its revenue last quarter to nearly half of its total work in the next two to three years, as demand for AI-related offerings accelerates across enterprise clients.
- AI services currently over 8% of Infosys revenue, growing fast
- Could comprise almost 50% of work in 2-3 years as client demand surges
- Infrastructure and model evolution pose long-term risks and opportunities
What happened
Infosys CEO Salil Parekh announced at the Bloomberg New Economy Forum that the company’s AI services segment—covering AI agent development, software coding, and legacy modernization—is expanding rapidly. Last quarter, AI-related work accounted for more than 8% of revenue and is growing at a double-digit sequential rate. If this trend persists, the AI services business could represent 20-30% of Infosys’ total work within a few quarters and nearly half within two to three years.
The current scale of AI services remains relatively small compared to Infosys’ overall size, but its explosive growth highlights a strong market demand. The company is also investing heavily in talent, with 20,000 AI-trained college graduates hired last year and a similar hiring target this year, ensuring its workforce is well-equipped to deploy AI solutions across client engagements.
Why it matters
This rapid AI adoption signals a transformative phase for Infosys and the Indian IT services industry at large. Parekh emphasized that the rise of AI is a positive development not only for Infosys but for the broader tech sector in India, buoyed by ongoing enterprise client adoption. AI is reshaping how companies manage technology, particularly through modernizing outdated systems and integrating AI-driven coding tools, which now engage about 80,000 of Infosys’ employees.
However, the company also identified risks linked to infrastructure and technology dynamics. The high cost and competitive landscape surrounding chips, sovereign data restrictions, and cloud regulations in key markets may constrain infrastructure expansion. Additionally, emerging AI foundation models that reduce inference costs could disrupt existing capacities and cost structures, while social and regulatory pushback in Western markets adds uncertainty about AI's long-term growth trajectory.
What to watch next
Market observers should track Infosys’ quarterly AI-related revenue growth to assess whether the projected jump to nearly half its business within three years materializes. The company’s ability to scale AI services at the current pace will also depend on how it navigates infrastructure challenges, talent development, and evolving client preferences, including shifts toward lower-cost or open-weight AI models.
On the regulatory and societal front, developments in data sovereignty laws and potential backlash against AI expansion in major global markets will be critical. Infosys and the wider Indian IT sector must balance technological innovation with compliance and social acceptance to sustain growth. The effectiveness of this balancing act will influence not only Infosys' future but also India's positioning in the global AI services market.