AI’s noose: Indian IT jobs, firms in grave danger because of ChatGPT, AI models, says JP Morgan

That ChatGPT is coming for our jobs, is a statement that has been thrown around a lot by alarmists. However, with each passing day, seeing what OpenAI’s generative bot is actually capable and how much money Microsoft is actually putting into ChatGPT, it seems that AI bots like ChatGPT is going to disrupt the concept of careers as we know it, sooner than later.

What’s even more interesting, and perhaps worrisome, is the fact how quickly it will change entire industries. In a recent report, analysts at J.P.Morgan have predicted that generative AI models such as ChatGPT will slow down market share gains and deflate pricing for Indian IT companies in the short term, which may lead to massive layoffs in the already ailing industry.

AI bots may deflate Indian IT sector
Consulting businesses like Accenture and Deloitte will gain market share over Indian IT firms like Infosys Ltd and Wipro Ltd in the short future as generative AI is adopted more generally, analysts at the brokerage said in a note to clients.

They said that generative AI might be a “deflation driver” in the near term for legacy services since it will compete on price, demand employee retraining, and cause a loss of competitiveness.

“ChatGPT is most likely to compress legacy services and least likely to deflate application services.”

Artificial intelligence company OpenAI’s chatbot has dazzled amateurs and industry experts with its ability to spit out haikus, debug code and answer questions while imitating human speech, helping it attract a $10 billion investment from Microsoft earlier this month.

Not eradication of jobs, but an evolution
Having said that, it is not likely going to erradicate jobs, but merely change the nature of jobs and employment as we know it today.

Contrary to popular belief, AI chatbots will assist enhance productivity and expand employability, according to the research. The models will also save expenses, ‘providing a new arena for change management initiatives,’ according to the authors.

However, AI, like any other technology, is not without its limitations. These result from a fresh new deflationary driver in managed services initiatives, as well as the requirement for retraining personnel who have been made redundant,’ according to the analysis.

AI not without its challenges
One such drawback of AI generative models is the danger to price. According to JP Morgan study, generative AI can be a deflationary driver in the near term for legacy services and pricing in general, entail staff retraining, and lead to a loss of competitiveness.

“There have been various historical productivity drives that have ended up being deflationary pricing drivers over the previous 20 years,” the study notes.

According to the report, several businesses have been experimenting with OpenAI and GPT3 in the last year, and numerous service providers are already working on projects integrating ChatGPT/GPT3. 

With such shifts, consulting heritage businesses like Accenture and Deloitte, as well as digital native organisations, are poised to gain market share over Indian Tech firms in the short term. While companies with a better graduate hiring and training infrastructure, like as Infosys and TCS, are likely to retrain employees faster than smaller competitors, the report adds.

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