Amidst Anthropic-driven disruption, Cognizant's AI leader claims that the threat to big IT companies is "overblown"

Cognizant Chief AI Officer Babak Hodjat said fears that new artificial intelligence tools will replace large IT services companies are exaggerated. In an interview with Reuters, he said businesses still need help from service providers to properly deploy and scale AI systems.

New AI tools from startups such as Anthropic have raised concerns that automation could disrupt the traditional business model of global software and IT services firms, especially in countries like India where the industry relies heavily on large workforces. However, Hodjat said companies cannot yet depend on a single AI agent to handle everything.

He explained that most organizations still need support to engineer, integrate, and manage AI systems inside their existing infrastructure. According to him, mapping AI solutions to real business problems requires expertise and cannot happen automatically.

Cognizant, which has more than 70% of its employees working from India, recently forecast annual revenue above Wall Street expectations due to strong demand for AI-related services. Other IT companies such as Tata Consultancy Services and Wipro have also said that growing AI adoption will increase demand for technology service providers rather than reduce it.

Despite this optimism, some companies have started cutting jobs because of automation. For example, WiseTech Global announced plans to lay off nearly one-third of its workforce while integrating AI into its software and operations. Last year, Tata Consultancy Services also reduced about 12,000 jobs, although the company later said the layoffs were not directly related to AI.

Hodjat added that automation will not eliminate entry-level opportunities at Cognizant. The company already generates about 30% of its code using AI and aims to increase this to 50%. During a recent earnings call, CEO Ravi Kumar S said the company hired about 25,000 fresh graduates in 2025 and expects to hire even more in 2026.

According to Hodjat, almost all Cognizant clients have experimented with AI agents, but many have realized they still need professional help to deploy these technologies effectively within their systems to achieve real business benefits.