In a post on X, the Mahindra Group chairman described extreme projections around artificial intelligence as “a great thought exercise,” but warned against treating them as inevitable outcomes. He referred to the widely discussed Citrini thought experiment that envisions a 2028 scenario where agentic coding tools reduce the cost of software production to near the cost of electricity.
In that hypothetical future, corporations sharply scale back outsourcing contracts, revenues at major Indian IT firms decline, exports shrink and India’s balance of payments comes under pressure. The scenario even imagines the International Monetary Fund entering preliminary discussions with New Delhi — underscoring the scale of disruption some AI forecasts predict.
Mahindra’s remarks suggest that while AI-led transformation is real, extrapolating worst-case scenarios into certainty may be premature.
He invoked a Mark Twain line that says, “reports of my death are greatly exaggerated.” He acknowledged that AI will undoubtedly pressure IT services companies, forcing them to reduce costs, rethink headcount-heavy models, and move away from pure effort-based pricing toward outcome and value delivery.
“But what if AI does not eliminate service providers and instead makes the best ones even more central?” he said.
His intervention comes at a time when the Nifty IT index has fallen sharply in February, amid fears that generative AI and automation could erode the labour-arbitrage model that underpinned India’s IT ascent over the past three decades. The sell-off has wiped out significant market value and sparked concerns that discretionary tech spending in the US and Europe could slow as enterprises experiment with AI-led productivity gains.The recent market anxiety has been fuelled by reports and research notes arguing that AI-powered coding agents could compress billing hours, automate application maintenance, and weaken traditional managed services revenue streams. In some versions of the bearish case, AI is seen as accelerating a structural decline that had already begun, rather than creating a new wave of demand.
Mahindra, while not dismissing the disruption, argued that as AI systems scale across enterprises, the need for integration, governance, and risk management will intensify rather than disappear.
“Someone still has to ensure secure data foundations; integration across legacy and cloud systems; governance, complianc,e and auditability; mission-critical reliability,” he said, adding that for medium and large enterprises, integration is complex, regulation is heavy, and the cost of failure is high.
That, he suggested, creates space for a different kind of services firm. The differentiator will not be who supplies effort, but who can deliver outcomes, manage risk and help clients achieve Scale at Speed, a phrase he associated with Tech Mahindra.
In Mahindra’s alternate scenario, services firms that pivot decisively toward AI orchestration, platform integration and outcome-based delivery models remain highly relevant. The role of IT providers, he argued, does not disappear. It evolves.
The broader debate reflects a deeper transition underway in the sector. Indian IT majors still derive a meaningful share of revenue from managed services and application work that could be automated. At the same time, new spending pools are emerging around AI infrastructure, cloud migration, cybersecurity and enterprise data modernisation.
Markets, Mahindra said, are swinging because they are trying to price that uncertainty, and in that sense may be behaving rationally.
For now, his message stands as a counterweight to the most dramatic AI-collapse narratives. The future, he wrote, remains “magically uncertain”. Whether AI becomes a revenue destroyer or a catalyst for reinvention will likely depend on how quickly Indian IT firms shift from billing for effort to delivering measurable outcomes in an AI-native enterprise world.
