Hexaware Technologies CEO says AI could cut IT project costs by 25%

Hexaware Technologies CEO R. Srikrishna has laid out a surprisingly candid math problem for the IT services industry: AI can boost productivity by roughly 40%, but clients will only capture about 25-30% of that in lower pricing. The rest, presumably, stays with the firms smart enough to deploy the technology first. The productivity-to-pricing gap The core argument is straightforward. When AI tools accelerate routine IT work by 40%, clients naturally want to renegotiate their contracts downward. But the reduction they can realistically extract lands in the 25-30% range, not the full 40%. The gap between productivity gains and pricing concessions is where IT services firms plan to protect their margins. This matters because Hexaware isn’t talking about some distant hypothetical. Over 50% of the company’s revenue is now categorized as “AI-infused,” with approximately 5% qualifying as fully “AI-native.” Those aren’t aspirational targets. They’re current numbers from the company’s AI Day event. The distinction between AI-infused and AI-native is worth unpacking. AI-infused means existing services enhanced by AI tooling, like using code generation assistants to speed up software developm...