2 weeks ago
AI not an existential threat, says PPFAS CIO Rajeev Thakkar
Rajeev Thakkar is a money expert at a company called PPFAS that helps people invest their savings.
He wrote a letter to explain how he feels about artificial intelligence, or AI for short.
AI is computer software that can do smart things, like writing computer code.
Some people are scared that AI will take away lots of jobs.
Mr. Thakkar thinks that fear is too big, especially when you look at entire industries.
He points out that when banks started using computers, people worried bank jobs would disappear.
But banks today have even more workers than they did in the 1980s and 1990s.
He believes AI will change the kind of work people do, not wipe out the work.
He also thinks AI will create new jobs, like keeping computers safe from hackers.
So Mr. Thakkar sees AI as a helpful new tool that changes how we work, not something to be afraid of.
PPFAS CIO Rajeev Thakkar called AI fears over IT services jobs 'largely overblown at the aggregate level.'
He compared AI to bank computerisation, noting banks employ far more people today than in the 1980s and 1990s.
He expects AI to write a significant portion of code while implementation needs remain, changing the composition of IT services rather than eliminating them.
He said AI makes hackers more efficient, which could boost demand for cybersecurity services and professionals.
PPFAS views the IT services sell-off as an opportunity but stays cautious on chip and memory stocks, whose high margins it expects to be cyclical.
- Who
- Rajeev Thakkar, Chief Investment Officer and Director of Parag Parikh Financial Advisory Services (PPFAS).
- What
- He argued in a note to unitholders that AI is not an existential threat to IT services, with cybersecurity expected to benefit.
- Where
- India, in the context of the Indian IT sector's AI-led fear and sell-off.
- When
- Not specified in the article; the statement was made in PPFAS's latest note to unitholders.
- Why
- To address investor concerns that generative AI could disrupt the IT services industry and to explain PPFAS's investment outlook.
AI as evolution (PPFAS view)
AI as disruption (market concerns)
Impact on IT services employment
AI as evolution (PPFAS view)
Fears around employment are largely overblown at the aggregate level; AI will eliminate some work but create more elsewhere, as bank computerisation did.
AI as disruption (market concerns)
Generative AI can write code and automate tasks, raising investor concerns that outsourced IT services work and roles will shrink.
AI infrastructure spending
AI as evolution (PPFAS view)
Over-investment is possible, but excess capacity can be absorbed as AI workloads grow, and hyperscalers also have large traditional businesses.
AI as disruption (market concerns)
Concerns exist that massive AI-related capital expenditure by infrastructure companies may not be justified if demand disappoints.
IT services sell-off
AI as evolution (PPFAS view)
The sell-off is an opportunity; the industry adapted to Y2K, cloud and SaaS fears and is expected to evolve similarly with AI.
AI as disruption (market concerns)
Generative AI disruption is seen as a real risk to outsourced IT services, which partly explains the sector sell-off.
Key facts
- Speaker
- Rajeev Thakkar, CIO & Director, PPFAS
- Organisation
- Parag Parikh Financial Advisory Services (PPFAS)
- Core stance
- AI fears 'largely overblown at the aggregate level'
- Historical parallel
- Bank computerisation from handwritten ledgers to mobile banking
- Expected beneficiaries
- IT services and cybersecurity
- AI models cited
- ChatGPT, Claude, Gemini, Grok, Llama, DeepSeek, Kimi, GLM, Qwen
- Direct AI exposure
- PPFAS has no direct exposure to OpenAI or Anthropic
- Sector caution
- Chip and memory stocks; high margins expected to be cyclical
Quotes
Rajeev Thakkar
Chief Investment Officer, Parag Parikh Financial Advisory Services
“Banks moved from handwritten ledgers to computerised branches, to networked branches on a centralised core banking system to internet banking to mobile banking.”
financialexpress.com
“AI will write a significant portion of computer code, but the need for implementation will remain.”
financialexpress.com
Sources
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