Investments in AI to surge in IT services as enterprises expand deployments: Report
Leading cloud service providers, or hyperscalers, are witnessing a strong demand for AI-driven solutions, prompting them to maintain high capital expenditure (capex) commitments.
ANI
Feb 17, 2025 12:00 IST
New Delhi [India], February 17 (ANI): The adoption of artificial intelligence (AI) is accelerating as enterprises move beyond proof-of-concepts to full-scale deployments, according to ICICI Securities report.
Leading cloud service providers, or hyperscalers, are witnessing a strong demand for AI-driven solutions, prompting them to maintain high capital expenditure (capex) commitments.
Tech giants like Microsoft, AWS, and Google are making significant investments to expand their AI and cloud infrastructure.
AWS reported a capex of USD 26.3 billion in the December 2024 quarter and expects this level of spending to continue through 2025.
The company sees AI as a transformative force, with inference technology becoming a core element, much like computing, storage, and databases.
Microsoft's capex, including finance leases, stood at USD 22.6 billion in the December quarter. The company plans to maintain similar spending levels for the next two quarters and expects strong investments in AI beyond 2025, though at a slower pace.
Google, on the other hand, has planned an estimated USD 75 billion investment in 2025, focusing on AI services, data centres, and networking to support its businesses, including Google Cloud and Google DeepMind.
Hyperscalers are also working on reducing AI consumption costs by improving software efficiency and scaling AI infrastructure.
Microsoft has achieved a 2x price-performance improvement with each new hardware generation and over 10x gains per AI model generation.
Both Microsoft and AWS have acknowledged DeepSeek's contributions to AI innovation. Microsoft noted that lower inference computing costs would drive increased use of AI applications, benefiting cloud and PC providers.
AWS' CEO commented, "I believe the cost of inference will meaningfully come down. I think it will make it much easier for companies to be able to infuse all their applications with inference and with generative AI."
IT services companies are also experiencing growing demand for AI-driven solutions, including agentic AI, GenAI, and cloud services.
Major IT firms have partnered with hyperscalers to support customers in adopting AI and cloud solutions. TCS reported a surge in AI and GenAI deployments in Q3FY25, while Infosys is developing over 100 new GenAI agents for its clients.
As AI continues to evolve, businesses across industries are expected to integrate AI into their operations at a much faster pace, making it a critical driver of growth for cloud and IT service providers alike. (ANI)
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