Generative AI is increasingly becoming a crucial component of major, large-scale IT agreements.

Generative AI (GenAI) projects are increasingly prominent in major IT service deals, indicating that the technology is maturing beyond its proof-of-concept (PoC) phase.

Focus on AI: Recently, IT firms have been landing significant contracts aimed at cost savings for clients or agreements for vendor consolidation to enhance efficiency amid persistent macroeconomic uncertainty. Due to its cost-effectiveness and productivity benefits, GenAI-related work is becoming a crucial element in these deals.

However, with tech budgets remaining mostly unchanged, spending on AI and GenAI has been coming at the expense of traditional IT budgets.

Analysts note that AI-led projects are gaining momentum, with GenAI work progressing from the PoC stage to large-scale implementation, as evidenced by recent large deal announcements.

Notable AI deals include:

• Xerox signing a deal with TCS to upgrade its IT technology using cloud and GenAI.

• Infosys undertaking GenAI-related projects with Danske Bank and Currys.

• Cognizant securing an $800 million deal with Gilead to enhance its customer service experience using AI.

• Wipro highlighting GenAI in its multi-million dollar agreement with Nokia to revamp its employee service desk.

Expert opinion: "Clients recognize the potential of GenAI and want to secure partnerships with capable service providers to avoid needing another vendor for future GenAI requirements," said Pareekh Jain, chief executive at EIIRTrend.