Bessemer Venture Partners (BVP) has unveiled its AI Services Roadmap, outlining how artificial intelligence is set to reshape India’s $264 billion IT services industry — transforming it from a people-powered engine into a technology-first ecosystem expected to cross $400 billion by 2030.
India’s IT services sector, long regarded as the backbone of global technology delivery, is entering a defining moment. The rise of large language models (LLMs) and generative AI is challenging the traditional outsourcing model built on three pillars — a vast talent base, cost efficiency, and the follow-the-sun delivery system. For decades, this formula powered growth and trust with Fortune 500 clients. Now, automation, intelligence, and data-driven workflows are rewriting the rules.
A Sector at an Inflection Point
According to BVP, India’s edge in talent and execution remains intact, but the industry must pivot sharply to stay competitive. AI is automating many of the tasks once handled by entry-level engineers, threatening the billable-hour model that underpins legacy IT economics.
While Indian IT giants continue to post steady revenues and margins, their growth remains tied to headcount expansion rather than productivity. With R&D spending under 2% of revenue — compared to over 20% for global product firms — most incumbents remain trapped in a “time and materials” cycle that rewards scale over innovation.
“AI is not killing IT services,” the roadmap notes. “It is reshaping them — forcing a transition from manpower-driven delivery to AI-led productivity.”
Why AI Won’t Replace, but Reinvent, IT Services
Three years after ChatGPT popularized generative AI, India’s IT exports have continued to grow. Enterprises still rely heavily on service providers for complex, domain-specific projects that demand deep context — something off-the-shelf AI cannot yet replicate.
This resilience is underpinned by decades of client trust, embedded engineering talent, and operational scale. Fortune 500 companies value Indian firms for their ability to manage large, multi-year programs with consistent delivery. Yet, structural barriers — including rigid pricing models and workforce composition — slow their transformation into truly AI-native organizations.
Some players are moving decisively. Wipro’s ai360 initiative, launched with a $1 billion investment, and similar programs across peers signal intent to evolve. But BVP cautions that scale makes reinvention difficult — creating an opening for agile, AI-first challengers.
The Rise of AI-First Challengers
Bessemer identifies three new business archetypes that are redefining the services landscape:
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AI-enabled services — Hybrid models blending automation with human-in-the-loop (HITL) oversight. Companies like Shopdeck and Teleradiology Solutions are already using AI to augment human experts, from customer engagement to medical diagnostics.
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Technology services for AI — Firms building the infrastructure that powers AI itself, including data pipelines, model operations, and evaluation frameworks. Scale AI is a notable example, having facilitated billions of annotations to train large models.
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Pure software platforms — Intelligent systems that automate end-to-end workflows with minimal human input. Players such as Leena AI, Graph AI, and Relevance AI are leading this charge, replacing repetitive human tasks with scalable, adaptive software.
These AI-first firms are built differently — with smaller teams, product-led mindsets, faster time-to-value, and outcome-based pricing. Their strength lies in combining deep domain expertise with AI automation, delivering results faster and cheaper than traditional IT services.
A $400 Billion Opportunity by 2030
While AI-driven efficiencies will compress prices in the short term, BVP projects that the overall market opportunity will expand as enterprises outsource more complex, AI-integrated workflows. “AI will create a new wave of outsourcing,” the report predicts, “as companies seek partners who can deploy, govern, and optimize AI solutions at scale.”
Bessemer expects India’s IT services market to reach $400 billion by 2030, powered by both legacy transformation and the rise of AI-native players. Founders building in this space have a rare opportunity to capture value by combining automation, data, and domain understanding into differentiated offerings.
BVP’s framework for evaluating such companies focuses on seven success levers — team quality, platform stickiness, time-to-value, margins, distribution, pricing strategy, and market focus. The most disruptive firms will demonstrate tangible impact within a quarter, integrate seamlessly with enterprise infrastructure, and scale rapidly through productized services.
The Road Ahead
Bessemer concludes that the next generation of Indian IT leaders will emerge from those who embrace AI as a multiplier, not a threat. The shift from headcount-led growth to outcome-led delivery will define the decade ahead.
“AI will not kill IT services — it will reshape them,” the report asserts. “The winners will be those who pair human expertise with AI-driven platforms to deliver smarter, faster, and more adaptive solutions.”
