Why India’s Tech Services Industry Matters More in the Age of AI

It is not often that a country receives two major tech investment announcements — back-to-back — from the world’s top two fundamental technology companies. Yet that is exactly what happened recently. 

On October 14, Google announced a $15 billion investment over five years (2026-2030) to establish its first India AI hub in Visakhapatnam, Andhra Pradesh. This represents Google's largest investment in India to date and the largest AI hub the company is building anywhere outside the United States.

A couple of days back, Microsoft announced a $17.5 billion investment in India, focussing cloud and AI infrastructure, over four years from 2026 to 2029. This represents Microsoft's largest investment in Asia and builds upon the $3 billion investment announced in January 2025. And yesterday, it inked partnerships with India’s four major technology services companies and committed 200,000 Copilot licenses across them — a scale never seen before.

Some may brush these off as routine corporate activity. I disagree.

This is a once-in-a-lifetime, century-defining opportunity for India.

Let me explain.

The Flow of Technology: From Glaciers to Rivers to the Sea

Microsoft and Google are fundamental technology companies. Their products — operating systems, search engines, AI models, cloud platforms — have historically centred around individual users.

But a shift is underway:

They are now expanding their focus towards enterprises, where the deepest complexity lies.

But here is the key problem:

Tailoring and applying fundamental technologies to sprawling global enterprises is extremely difficult.

This is precisely where Indian technology services companies enter the picture.

For four decades, they have delivered human-generated technology services to the world’s largest and most complex corporations and institutions. They have, by now, earned their trust — hard-won, consistent, and deep.

Microsoft Chairman & CEO Satya Nadella yesterday used the term “frontier firms” to describe Indian tech services companies. I think the term is paradigmatic.

In this new AI economy, we are witnessing a structural flow of technology:

Fundamental Technology Companies → Frontier Technology Services Companies → Global Enterprises & Government Institutions

Like water flowing from a vast multi-glacier mountain range, through several rivers, into the sea.

India sits at the middle of this flow — and that middle is where value, trust, and decision-making accumulate.

The Human Trust Advantage

AI may generate the code, the workflows, even the insights.

But AI cannot substitute for trust.

Enterprises will not allow AI to autonomously rewrite their ERP, CRM, supply chain, HR, or finance systems without trusted intermediaries who understand the terrain.

Indian technology service firms are those intermediaries.

For decades, they have handled:

million-line code migrations

multi-country ERP rollouts

high-stakes, compliance-bound systems

critical infrastructure operations

long-term digital transformation programmes

If AI is the new engine, trust is the fuel — and India holds a full reservoir.

A Crucial Point: Frontier Firms Apply AI to Themselves First

Most people assume Indian IT will apply AI only to clients.

But there is a deeper layer:

Indian frontier firms are first applying AI to themselves.

And this changes everything.

These enterprises are huge — 200,000 to 600,000 employees each — scattered across continents, domains, and time zones. If they can transform their own operations using AI (which they have already begun doing), they become live case studies for the rest of the world.

Their self-transformation becomes:

a template

a reference architecture

a demonstration of feasibility

a “pathway model” for global enterprises

This is why Microsoft and Google are not investing in India as a market —

they are investing in India as a partner in global AI transformation.

Will Copilot or Gemini Cannibalise SAP or Salesforce?

This is a fundamental question, and the answer is clear:

AI copilots do not replace enterprise software; they sit on top of it.

Copilot/Gemini are horizontal intelligence layers.

SAP, Salesforce, Workday, Oracle are systems-of-record.

Enterprises do not throw away their foundations.

They modernise them.

The real competition is not:

Copilot vs. SAP

but

AI-native workflows vs. legacy workflows.

This means:

SAP must innovate faster (with Joule)

Salesforce must embed deeper AI (Einstein GPT)

Microsoft must integrate its AI with every enterprise system

Indian IT must orchestrate the new AI workflows

This is not zero-sum competition.

It is an innovation race, and everyone must run faster.

And here again, India stands to benefit the most.

Enterprise Software Giants in India: A Hidden Force Multiplier

SAP, Salesforce, Oracle, and others already have:

some of their largest engineering/R&D hubs in India

deep, decades-long partnerships with Indian IT firms

huge enterprise markets within India

This existing ecosystem is not incidental.

It is a ready-made runway for AI transformation.

Enterprise software firms rely on Indian partners for:

global customizations

multi-country rollouts

data governance

integrations

legacy modernization

regulatory alignment

Now, when AI gets embedded into ERP and CRM systems, the implementation work will naturally flow to India’s frontier firms.

In other words:

AI value creation will pass through India.

What About OpenAI? Will It Also Partner with Indian Frontier Firms?

I asked this question to OpenAI's ChatGPT. It said: Yes — and for structural reasons, not sentimental ones:

OpenAI is itself a fundamental technology company.

It has enterprise clients across sectors.

Its agentic AI systems will increasingly power core workflows.

But fundamental tech companies cannot scale global enterprise deployment alone.

They need:

integration partners

governance partners

customization partners

domain-specialist partners

And who does this at global scale?

Indian frontier firms.

Today, many OpenAI deployments flow indirectly through Microsoft. But as OpenAI expands its enterprise stack, direct partnerships with Indian IT companies are inevitable.

Expect a progression in the coming years:

Training & certifications → Joint solutions → Enterprise alliances → Deep AI transformation programmes

The logic is simple:

Global AI modernisation cannot occur without India.

India as the World’s AI Application Layer

Let me put the thesis crisply:

Fundamental technology companies: build the frontier

Enterprise software companies: encode organisational logic

Indian frontier firms: apply, adapt, integrate, and operationalise AI for the world

India is not merely a beneficiary.

India is not merely a talent hub.

India is not merely a consumer market.

India could become the world’s AI-powered enterprise services backbone.

This could be the fundamental structural shift of our time.

Conclusion: A Century-Defining Opportunity

The dual investment announcements by Microsoft and Google, I assert, are not isolated events.

They are commitments to redesign the global enterprise technology landscape — with India placed right at the centre.

Indian frontier firms possess:

global trust

operational scale

multi-domain experience

deep platform knowledge

and now, first-hand AI transformation capability

This combination is unprecedented.

We are witnessing the emergence of a new technological world order — one where AI flows from foundational creators to frontier appliers to global enterprises, and India becomes the indispensable bridge.

This is why I believe, without hesitation, that these investments represent a once-in-a-century opportunity for India’s technology services sector — and for India’s long-term economic trajectory.