AI Will Not Eliminate IT Services but Create New Job Opportunities: JPMorgan Chase

New Delhi

According to a new report by JPMorgan Chase’s Asia Pacific Equity Research team, artificial intelligence (AI) is unlikely to replace IT services companies anytime soon.

Rather than shrinking the IT industry, AI is expected to help companies accomplish more work within the same budget. The report states that fears of AI eliminating IT companies have been significantly exaggerated.

AI to Create, Not Reduce, Opportunities

The report emphasizes that AI will not reduce opportunities for IT firms but instead generate new avenues for growth. The brokerage firm compared AI to previous technological shifts such as offshore labor models, enterprise software, and cloud computing.

In each of these cycles, emerging technologies did not eliminate IT services; instead, they transformed the way companies operated. Similarly, AI is expected to enable organizations to handle more projects without necessarily increasing budgets.

Areas of Growing Demand

JPMorgan highlighted several areas where demand is rising, including:

• Modernizing legacy systems

• Rewriting customized SaaS applications

• Building AI agents for operational use

• Ensuring trust and reliability in AI systems

• Integrating physical AI solutions

The report noted that all these areas will require strong IT services support.

Productivity Over Replacement

It also pointed out that enterprise technology teams often operate with limited funding compared to business expectations. In such a scenario, AI is more likely to be used to enhance productivity rather than completely replace IT service providers.

The brokerage cautioned against the simplistic assumption that AI can automatically develop enterprise-grade software and fully replace the integration and customization work performed by IT companies—stating that such an outcome is unlikely.

The report described IT firms as the “plumbers of the technology world,” underscoring their crucial role in ensuring complex systems function smoothly within large organizations.

Market Concerns Reflected in IT Stocks

According to the report, the recent weakness in IT stocks reflects investor concerns that rapid advancements in AI could slow revenue growth and reduce the total addressable market for Indian IT companies. However, JPMorgan suggests these fears may be overstated.

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