Is AI fear an overreaction? Ex Infosys CEO Vishal Sikka on the threat and who will survive

A selloff in Indian software stocks and growing fears that artificial intelligence could automate large parts of technology work have triggered pessimism around the sector. Former Infosys CEO Vishal Sikka has said the AI disruption is real, but its impact will unfold over time and depend on how the industry adapts.

When asked whether the stock market was overreacting to AI fear, Sikka said, “The stock market reacts the way it does. I have no comment on what the stocks will do in the near term and things like that.” 

The former Infosys CEO, however, addressed concerns around AI’s impact on jobs and business models. “There is no doubt that the disruption to the knowledge work in software development of repetitive processes is here. That disruption is real. There is also no doubt that it takes time to propagate and to diffuse across industries and so on,” he said while speaking to CNBC-TV18.

Sikka, founder and CEO of Vianai, pointed to the scale of India’s technology workforce and said the collective potential of this workforce is ‘infinite.’ “We have 1.7 million people working in the IT services industry, and what is the collective potential of 1.7 million people? In my mind, that collective potential is infinite.”

The question, he said, is speed – whether companies evolve before their existing work disappears. “The fundamental challenge in front of us is – are we going to innovate and adapt ourselves towards this new reality faster than the waves come and hit our current work, our past work? And those who make that switch will survive.”

India’s technology sector has passed through earlier upheavals – custom development, packaged software, Y2K, mobile computing, and cloud services. This time, he said, the pace is different.

“We have a great industry, we have thrived for 50 years now. We have seen disruptions before, from custom development to package systems, Y2K, mobile, cloud – and this is another one of those. But it is not just one because it is very fast. And our human brain is not wired to understand exponential changes. And the change here is incredibly fast, and it hits at the center of what we do.”

The outcome, he added, depends on how quickly companies turn the change into an advantage. “But nevertheless, the equation is still the same one. Can we adapt to this and make it a tailwind for us faster than it will destroy the prior generation of work that we used to do or that we have been doing so far? This is the equation.”

His remarks come as global and Indian software stocks faced heavy selling driven by a narrative that AI agents could automate complex enterprise workflows and capture a large share of software budgets. The IT index in India has fallen about 15% in February as markets attempt to price in the disruption.

Benchmark indices Sensex and Nifty fell more than 1% on Friday amid broad-based selling, particularly in metal, IT, and commodity shares. TCS and Infosys dropped nearly 9% in the last week.