AI impact on business models key investment theme for next 3–5 years: Ashi Anand

Ashi Anand, Founder and CEO of IME Capital, the question of how artificial intelligence (AI) will reshape businesses could be one of the most important investment considerations over the next three to five years.

Anand said investors are reassessing IT services companies as AI improves productivity and changes cost structures. While AI could reduce operating costs by lowering dependence on human labour, it may also create pressure on revenues if projects are completed faster at lower pricing.

He noted that the key issue for investors is whether new demand can offset this potential revenue compression.

“IT services continues to be a difficult call,” Anand said, adding that valuations may appear attractive but uncertainty around future demand could keep stocks volatile.

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According to him, a return to earlier valuation multiples may not happen soon until visibility improves on how AI affects business models.

Anand said investors should focus not only on risks but also on sectors that directly benefit from AI adoption.

He highlighted rising global capital expenditure by cloud companies to build AI infrastructure, including data centres, semiconductors, advanced memory, power systems, and cooling technologies.

“Indian investors need to start looking at global allocations quite closely,” he said, noting that India currently has limited listed companies that are direct beneficiaries of the AI infrastructure cycle.

Addressing concerns about job losses and broader economic impact, Anand said technological shifts historically create new industries and demand even as existing roles change.

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AI-driven productivity improvements could allow companies to modernise legacy systems and undertake projects that were previously not feasible, potentially generating incremental technology spending.

He added that enterprise IT spending may remain stable as businesses reinvest productivity gains into new initiatives.

While acknowledging potential risks to employment, consumption, and sectors such as autos, consumer goods, and real estate if services demand weakens, Anand said the long-term outcome may not be as negative as feared.

He described AI adoption as still at an early stage, with many enterprise use cases yet to develop.

“Our view is that productivity benefits would actually be utilised in incremental demand,” Anand said, suggesting that economic disruption could be balanced by new growth opportunities over time.

For the full interview, watch the accompanying video

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