New Delhi: Zensar Technologies Ltd has nearly 100 proofs-of-concept (PoCs) projects centred around generative artificial intelligence (AI). However, chief executive Manish Tandon cautioned that the AI field is at risk of being overly focused on demonstrations and prototypes rather than addressing practical challenges and limitations of the technology.
“Generative AI is leading to billable PoCs and not multi-year projects. Today, generative AI is suffering from what we call a ‘demo disease’. But it’s important to understand that just because a demo works doesn’t mean that a technology is scalable as well. Clients are also realizing the limitations of what generative AI can and cannot do. To be clear, the revenue inflow from generative AI is not in the millions, at least not yet. But, the number of PoCs is close to 100 for us,” Tandon said.
As an early example of a concept, one offering by Zensar is a generative AI-powered engineering assistant based on Microsoft’s Azure AI cloud platform to help software developers write code. However, Tandon said there are legal concerns around the validity of these tools and conflicts and infringements they may raise.
“While we explore internal usage of generative AI, legal issues around the field are still unresolved. In our industry, we work for hire—the intellectual property (IP) for what we create belongs to our clients. With tools like Copilot, it’s not very clear as to whom the IP of the created code lies. We’re therefore being very cautious, and we’ve limited the use of these tools to only a bunch of researchers at our labs until legal issues are resolved amicably,” he said.
Zensar reported a stable but conservative September quarter, in line with the entire information technology (IT) services industry.
He expressed caution around what the immediate future holds for the sector and how the slowdown may play out.
“In the first half of this year, we earned more than we earned in the entire last year. But it’s a tough market out there, and we’re a part of it too,” he said.
“We’ve expanded our addressable market space, because of which there has been a drop in traditionally strong verticals such as hi-tech and manufacturing. But, other verticals have seen significant growth, which is a positive sign in this tough period,” he added.
“More than billing of previous deals, discretionary spending has declined significantly. During the pandemic, and when the (US Federal Reserve) interest rates were close to 0%, the propensity to take up high-risk digital projects was very high, which was benefitting us. Decision cycles are taking longer, and budgets are constrained everywhere we go. We’re already seeing companies continuing to declare retrenchment—as a result, the cautionary approach is not just about billing large deals or staffing,” he further added.
Zensar, the top executive said, is also likely to consolidate its overall headcount—which declined in the September quarter. This could be a part of “balancing the demand and supply,” Tandon said.
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Updated: 28 Oct 2023, 01:08 AM IST
