Bangalore, 28th Oct 2025: Bessemer Venture Partners revealed an AI services roadmap today – their thesis on how AI native companies will disrupt India’s $264 billion IT services sector.
India’s IT services exports form the backbone of global technology and is a powerhouse driving digital transformation worldwide. Today, the industry stands at a generational crossroads. As large language models (LLMs) and AI disrupt traditional, people-heavy outsourcing methods, both global enterprises and nimble startups are disrupting traditional delivery models.
Before the current wave of AI-native disruption, India’s IT services giants had perfected a powerful operating playbook-built on three pillars:
(a) a vast and skilled talent pool,
(b) strong cost arbitrage, and
(c) the ‘follow-the-sun delivery’ model.
Despite fears of displacement after the rise of ChatGPT and other LLMs, Indian IT services revenues and margins remain resilient. Enterprises still rely on these firms for complex projects, where embedded engineers and subject matter experts provide business-specific context that AI alone can’t capture.
Yet, seamless transformation into an AI native world is hindered by billable-hour models, standardized entry-level workforces, and low R&D spend (under 2% versus over 20% for global product firms). In essence, the growth of large, traditional IT and outsourcing firms remains driven by headcount rather than productivity gains.
AI-first startups and platforms are already proving their ability to deliver outcomes that are better, faster, and more cost-efficient. They benefit from:
Exceptionally skilled founding teams with deep domain expertise
AI-driven, product/platform-first mindsets
Rapid time-to-value and measurable ROI
Usage or outcome-based pricing
Bessemer has identified three fast-emerging categories of AI-first challengers poised to disrupt existing service models:
Pure software plays: intelligent platforms that fully automate tasks end-to-end-delivering high-speed, scalable outputs with minimal human input. Eg: Graph AI , Leena AI
AI enabled services – hybrid models blend AI automation with human‑in‑the‑loop (HITL) oversight. Example: Crescendo and Shopdeck
Services for AI – These firms supply the data, model operations infrastructure, and evaluation capabilities needed to build net new AI solutions. Eg: Scale, Turing
Bessemer highlights seven key factors that determine a challenger’s ability to truly disrupt incumbents: team quality, platform stickiness, time-to-value, margins, distribution, pricing strategy, and market focus.
India’s IT services industry is projected to exceed $400B by 2030, as AI fundamentally reshapes how enterprises source and deliver technology. While AI-driven efficiencies will compress pricing in the short term, the exponential growth in AI capabilities will dramatically expand both the propensity and ability of global enterprises to outsource complex workflows. This next wave of outsourcing will fuel the sector’s growth, with AI-first products and startups poised to capture outsized value by delivering smarter, faster, and more adaptive solutions.
Leave a Reply