Kotak Warns IT Sector Faces Tough Year Amid AI Deflation

Smart computer programs called AI are helping companies build software faster.

Big technology companies in India, like TCS and Infosys, help other companies with their computer work.

When AI does some of that work, customers need fewer hours of help from the tech companies.

That means the big tech companies earn less money from their regular services.

A research company called Kotak thinks the tech companies will have a hard year ahead.

AI business is growing quickly, but it is not big enough yet to replace the money being lost.

Some smaller tech companies, like Persistent Systems, are doing better by winning new customers.

The big companies are saving money by cutting costs, such as delaying pay raises.

Even though they earn less, they are still keeping their profits safe.