(Deleted obsolete advisory note is updated. No changes are made to the text.)
By Divya Chowdhury
MUMBAI, Dec 5 (Reuters) – A potential artificial intelligence bubble will deflate faster than past technology cycles, but will give way to an even stronger rebound as corporate adoption catches up with infrastructure spending, the head of Japanese IT company NTT DATA Inc said.
Despite concerns around supply chains, the direction ahead is clear, Chief Executive Abhijit Dubey said in an interview with the Reuters Global Markets Forum.
“There is absolutely no doubt that in the medium and long term, AI is a massive secular trend,” he said.
“Over the next 12 months, I think we’re going to have a little bit of normalization… It’s going to be a short-lived bubble, and (AI) will come out of it stronger.”
As demand for computing continues to outstrip supply, “supply chains are almost guaranteed” for the next two to three years, he said. Pricing power is already shifting toward chipmakers and hyperscalers, reflecting “their inflated valuations in the public markets,” he added.
AI has triggered the biggest technological shakeup since the advent of the Internet, driving trillions of dollars in investments and eye-watering capital gains. But it has led to a shortage of memory chips, sparked regulatory scrutiny and created growing concerns about the future of work.
Dubey, who is also the company’s chief AI officer, said his company has begun to rethink hiring strategies as AI reshapes labor markets.
“There will clearly be an impact… Over a five- to 25-year horizon, there will probably be dislocation,” he said. However, he added that NTT DATA continues to hire at all locations.
Speakers at the Reuters NEXT conference in New York discussed how AI can disrupt work and job growth.
May Habib, CEO of artificial intelligence startup Writer Inc., said clients are focused on slowing workforce growth.
“You close a client, get on the phone with the CEO to start the project, and say, ‘Great, how soon can I eliminate 30% of my team?'” he said.
Still, a PwC survey of the global workforce released in November suggests that the reality of using generative AI still doesn’t match boardroom expectations.
Daily use of GenAI remains “significantly lower” than widely touted by executives, PwC said, even as workers with AI skills earned an average pay premium of 56%, more than double last year’s figure.
PwC also noted a widening skills gap: About half of non-managers reported having access to training resources, compared to about three-quarters of senior executives.