Vishal Sikka Warns of AI Valuation Gap, Urges Indian IT to Evolve

• Vishal Sikka, founder and CEO of Vianai Systems and former Infosys CEO, warns of a significant valuation gap in the AI sector, citing a 'hype cycle' where massive capital expenditure isn't matched by revenue generation.
• Sikka highlights the discrepancy: while AI infrastructure spending (GPUs, CPUs, etc.) is estimated at $750-$800 billion annually, new revenue generated is far less, creating a $200 billion gap over a four-year amortization period.
• He advises Indian IT companies to embrace AI-driven automation, transforming into software companies with proprietary AI platforms to retain value, moving away from purely people-based pricing models.
• Sikka expresses optimism for India's role in the global AI race, emphasizing the nation's 'demographic dividend' and the potential for its large, young population to leverage AI tools.
• He urges India to build foundational AI technologies, including vertical models for specific industries, models for local languages, and 'world models' tailored to the Indian context, asserting that it's still early in AI development.

Why It Matters: Vishal Sikka warns of an unsustainable AI valuation gap and urges Indian IT to adapt by becoming software companies.