Infosys says AI revenue grew 29% sequentially and now makes up 10.5% of its revenue, but the same technology is putting pressure on prices in its existing services business. That tension helps explain why AI can be both a growth opportunity and a drag on a technology firm’s established work.
Watch Desk analysis
What happened
The Register reports that Infosys’s second-quarter revenue grew 1.5% year on year, while the company lowered its full-year growth forecast from 1.5–3.0% to 1.0–2.0%. The publication says executives described customers expecting lower prices when AI makes services cheaper to deliver, with those savings increasingly built into multi-year deals.
Infosys chief executive Salil Parekh also pointed to AI as one factor reducing service costs. The company says it is protecting margins, including by walking away from a large deal that did not meet its return expectations, and is pursuing internal efficiencies through a programme called Project Maximus. The Register reports that Infosys won $8.8 billion in new deals in the first half of its financial year, 68% of them from new customers.
Why it matters
The figures show two sides of AI’s effect on a services business: new AI work is growing, while customers may expect some of the productivity gains to appear as lower prices for existing work. Revenue from AI is not automatically extra growth if it also changes what clients will pay elsewhere.
That is a more useful lens than treating every AI revenue number as a victory lap. For buyers, the question is whether lower prices reflect genuine efficiency; for suppliers, it is whether new work can offset pressure on established contracts.
Our read
Infosys’s numbers make the AI productivity bargain unusually visible: the technology can create a new line of business while making the old one harder to price. The Register’s account does not establish how much of the revenue slowdown is caused by AI, and the company also cited competitive pressure and softer spending in retail and high tech. Still, the tension is real enough to watch in the next set of results.
What to watch
- Whether Infosys’s AI revenue share keeps growing in subsequent quarters.
- Whether its revised full-year forecast holds as customer spending and pricing evolve.
- Whether Project Maximus and new work help protect margins without sacrificing growth.
Discussion spark: If AI makes a supplier’s existing services cheaper to deliver, should customers expect lower prices, or should the supplier keep those productivity gains?
Sources and evidence
- AI slows growth for Infosys and keeps it afloat at the same time (28 October 2026, 02:18 UTC)
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