Davos 2026: Wipro CEO Srini Pallia says AI is driving a new IT services boom

At the World Economic Forum (WEF) in Davos, Wipro's CEO, Srini Pallia, shared an optimistic outlook on the IT services sector, highlighting a remarkable surge in demand fueled by artificial intelligence. Pallia noted that 2026 is set to mark a pivotal transition for the industry. While the previous year was characterized by experimentation and small-scale trials, this year is all about accountability and full-scale implementations. Companies are moving beyond mere testing of AI technologies; they are now focusing on extensive, enterprise-wide deployments, creating a robust pipeline of new contracts, particularly for Indian software exporters. "For our clients, 2025 was more about deploying AI and conducting proof-of-concept projects aimed at enhancing productivity. However, in 2026, there is a significant shift as boards and CEOs demand to see tangible returns on their investments," Pallia stated. He also pointed out that AI is transforming the economics of the IT industry. The incorporation of AI-assisted software development is projected to lower coding and testing costs by approximately 25%. Although this may exert pricing pressure, Pallia believes it will ultimately generate a higher volume of work, as clients reinvest their savings into further digital transformation initiatives. "AI-assisted software development will reduce costs by around 25%, leading to substantial productivity improvements in coding and testing. This will result in new projects, ensuring that IT budgets will not contract in the long run," he emphasized. Despite facing challenges in recent years due to economic uncertainties leading to cutbacks in technology spending, Wipro views the current AI trend as a stabilizing influence. The company has previously allocated $1 billion in 2023 to enhance its AI capabilities and is now concentrating on 'agentic AI' and consulting-led services to assist global clients in modernizing their core systems.