AI's Impact on Indian IT: SaaSpocalypse or Productivity Reset?

• Indian IT stocks faced pressure after Anthropic's Claude launch, sparking fears of a "SaaSpocalypse" due to AI's automation potential.
• Industry veterans Mohandas Pai and R. Chandrasekhar argue the existential threat is overstated, citing the vast legacy software base and early stage of comprehensive AI transformation.
• AI tools like Claude may apply to 25-30% of application development work, but complex tasks like system integration and legacy modernization are not easily automated.
• While AI boosts productivity (8-15% now, 15-30% expected), reducing employment intensity, it also creates new opportunities for IT service companies to help enterprises adopt AI.
• The debate highlights a shift from a headcount-driven model to one focused on capability, with IT firms needing to adapt to AI-led transformation to remain competitive.