Artificial intelligence is creating a new growth path for the technology-services industry while putting pressure on traditional IT services, according to Capgemini CEO Aiman Ezzat.
Speaking to a business news channel, Ezzat said AI could create a new $400-500 billion market for technology services in the coming years. At the same time, AI is allowing companies to complete existing work with fewer people and in less time, creating what he described as deflation in traditional IT services.
“Without the Artificial intelligence opportunity, we’d have pretty much a flat industry,” he said.
The shift creates a clear contrast for the industry. A software project that once needed 100 people could now be completed with a smaller workforce because of AI. This can reduce the amount companies charge for the same work, putting pressure on revenue from traditional services even as businesses continue to increase their use of technology.
At the same time, companies are investing in new AI-related work. This includes AI adoption, technology modernisation, product and process redesign, and the deployment of AI agents.
Ezzat expects this new market to drive industry growth of around 4% to 5% over the next 3 to 4 years, with growth potentially accelerating later as the current deflationary pressure eases. His estimate is broadly in line with Infosys Chairman Nandan Nilekani’s projection of a $300-400 billion Artificial intelligence opportunity.
AI is also changing how Capgemini charges customers. Around 3 years ago, about half of its business followed a time-and-material model, where clients paid based on the people and time required. This fell to around 35% last year and could eventually reach 20-25%, Ezzat said.
The company is moving towards fixed-price and outcome-linked contracts. As Artificial intelligence improves productivity, this model allows service providers to retain more of the benefit from completing work more efficiently. Pure outcome-based pricing, however, remains a relatively small part of the business.
Ezzat also said Capgemini had stopped reporting AI bookings because there was no clear definition of what should qualify as AI-related work. The company plans to start reporting AI-related numbers next year based on 5 defined “value pools”, including technology modernisation and the redesign of products, services and business processes.
As AI agents become more widely deployed, Ezzat expects governance, cost and cybersecurity to become increasingly important.
Capgemini is also reskilling its workforce and has used acquisitions including WNS and Cloud4C to strengthen its AI and technology sovereignty capabilities.
The broader shift is clear: Artificial intelligence is making parts of traditional IT services cheaper while creating a new market that could replace the growth being lost from older services.
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