Only 15% of Indian IT is Real AI Work

Sector6  Jan 28, 2026 The bi-weekly newsletter by AIM that brings the biggest shifts shaping IT, AI, and GCCs. Only 15% of Indian IT is Real AI Work India's largest IT firms spoke of thousands of AI projects, hundreds of agents, and AI-first delivery. The numbers sounded like a structural shift. They were not false. They were just incomplete. By Mohit Pandey Only about 15-25% of Indian IT's much-hyped AI projects are actually core, standalone programmes with business-critical impact. The vast majority live quietly inside existing contracts, delivery models and dashboards, improving speed and margins rather than transforming what clients actually buy. The real story is layered. At the bottom sits the largest volume of activity, and from the outside, it barely looks like change at all. To be sure, developers are writing code faster using copilots. Test engineers generate scripts with generative tools. Support teams summarise incidents and tickets through chat interfaces.  Yet, clients see the same scope, the same SLAs, and the same pricing logic. Sanchit Vir Gogia of Greyhound Research described this as the comfort zone. When providers talk about being 'AI-infused', they often bundle everything under a single, reassuring label. Work gets done faster. Margins are protected. Delivery velocity improves. Governance remains untouched. Gaurav Vasu of UnearthInsight points out where this infusion actually takes place: application modernisation with AI-assisted coding; automated testing and regression; data cleanup and schema mapping; incident prediction and log analysis in infrastructure operations.  What does this mean? Traditional IT services, just executed differently. Less manual effort, more supervision and validation. That explains slower hiring and steady margins without any visible shift in contracts. The middle layer is where AI becomes visible, but not decisive.  Chatbots are added to migration programmes. Automated summaries appear. Agent assistance is tucked into workflows. These are not new deals, but old scopes with AI stitched inside. Pricing remains traditional. Governance stays familiar. AI exists, but it lives inside old wrappers. AIM Network Deep Dive >> Microsoft just declared war on the silicon industry. With the unveiling of the Maia 200, the company is laying the groundwork to challenge NVIDIA head-on. In this episode of Front Page, we analyse how Maia 200 beats Amazon's Trainium by 3x, outpaces Google's TPUs, and is positioned to power the next generation of OpenAI's GPT-5.2. Is this the beginning of the end for the CUDA moat? Before we dive into Indian IT's AI story, here's a quick scan of this week's top developments  >> Anthropic has added Amplitude, Hex, Asana, monday.com, Box, Canva, Figma, Clay and Slack inside Claude conversations. Meta has announced an up to $6 billion, multi-year agreement with Corning to source fibre-optic cables for its US data centres. The Western Union Company has launched a new GCC in Hyderabad in partnership with HCLTech. Swiggy has introduced AI-driven ordering capabilities, allowing users to place food, grocery, and dining requests through chatbots such as ChatGPT, Claude, Google Gemini, and other AI agents. NVIDIA has launched its Earth-2 family of open-source AI models for weather and climate forecasting. Very few projects move beyond the surface level. The break only comes at the top layer, where AI itself is the product. This is where firms build or operate agents, deliver enterprise copilots with retrieval and grounding, and run orchestration layers where decisions trigger autonomously. Delivery stops being deterministic.  This layer remains small. Infosys says it has 4,600 AI projects. UnearthInsight estimates that only 15-20% of these qualify as standalone AI mandates with clear budgets and board visibility. About 50-60% are AI embedded inside cloud, data, or application contracts. Another 20-30% are pilots and early experiments. Neeti Sharma of TeamLease Digital arrives at a similar conclusion. Only 15-25% of AI projects qualify as core programmes with business-critical impact. The majority exist as components inside larger transformation deals. Project math also inflates perception. A single global transformation rolled out across regions becomes multiple projects on a dashboard. Internal enablement turns into an initiative. The volume is real, but it does not represent thousands of board-level AI transformations. Revenue data reinforces this view. In most large contracts, AI rarely appears as a separate line item. Clients pay for outcomes. AI is the delivery engine, not the product. Typically, only 5-10% of deal value is directly attributable to AI work, even when 20-30% of delivery uses AI tools internally. The immediate impact, then, is on margins rather than topline growth. Vendors win by delivering faster with fewer people. Productivity gains are largely absorbed instead of being fully monetised. So has Indian IT changed? Yes, in how work gets delivered. No, in what most clients are actually buying. The AI Foundry by Tredence in Chennai: A Workshop for Builders of Real-World AI The AI Foundry hosted by Tredence, in association with AIM, is heading to Chennai. On February 7, senior AI and data science professionals will gather for an invite-only developer workshop focused on one question that matters right now: How to move from experimenting with AI to actually building systems that work in the real world? Click here to register now. Best Firm for Data Scientists – Showcase your leadership in data science and build a thriving workplace. 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