India's IT model is out of date. Can it reinvent itself?

Indian IT companies have weathered earlier technological shifts. The rise of generative AI is now threatening the pyramid model that relies on large teams for repetitive coding and maintenance work. AI tools are automating those tasks, putting pressure on the industry's cost structure.

The sector's traditional model, built on scalability through low-cost labor, looks increasingly fragile. The impact on software margins from AI coding assistants, as seen in OpenAI's ChatGPT work pressures software margins, offers a parallel.

The industry's next earnings season, starting in July, is the first scheduled test of AI's impact on revenue and margins.