Fears Of AI Replacing IT Firms Are Misplaced, Says Cognizant CEO

Cognizant CEO Ravi Kumar S has played down investors’ concerns about Anthropic’s new AI tool replacing IT firms following a big shake-up in the industry. Calling the fear of IT companies being replaced by AI tools ‘misplaced’, he argued that the economic value from these technologies has not yet meaningfully shifted into enterprises.

IT stocks suffered a major panic selling at a global level in the last two days after the new legal and data plug-in in Claude Cowork, allowing users to do legal and consulting work without any need for large enterprise software and assistance.

The panic selloff wiped out Rs 2 lakh crore in market value from IT stocks yesterday.

Kumar speaking after post-earnings said there is a common assumption that simply plugging

new tools or technologies into enterprise systems will automatically generate value. However, he noted that if this were the case, enterprises would have already seen meaningful gains over the past three years since OpenAI launched ChatGPT. Instead, he argued that much of the value from AI continues to remain at the infrastructure layer rather than flowing into enterprises.

He also played down the impact of recent AI announcements on the near-term outlook for the IT services sector.