Inflationary fears won’t impact tech spends: IBM’s Patel

IBM India and South Asia managing director Sandip Patel, on being asked whether annual tech spends by clients would be impacted next year due to the prevailing macroeconomic situation, said “not much” of that trend was witnessed in India even as global institutions like the World Bank had revised upwards the country’s fiscal year 2023 growth estimates.

“Honestly, we don’t see that trend (inflation) much here. The World Bank has come out with their revisions in growth outlook for India,” Patel told ET in an interview. “There are probably some (growth) concerns around Western Europe. But technology will always act as a deflationary mechanism irrespective of any kind of an inflationary cycle…”

He said there was a huge push for companies to start catering to customers who are becoming sophisticated users of technology. He was in the city for the company’s AI (artificial intelligence) Day on Thursday.
Global technology spending is expected to “moderate” owing to high inflation and recessionary fears in markets like the United States, though it would still record a year-on-year increase next year, IT sector experts have said.

A pulse survey of 600 major enterprises from the Global 2000 shows project budget increases of 11% over the next year despite recessionary fears, according to IT research firm HfS Research.

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IBM has worked with State Bank of India as the tech partner to develop its one-stop marketplace application Yono and said 4-5 Indian banks are laying the roadmap to develop similar apps over the next few years to capture the digital ecosystem.

On AI-powered chatbot ChatGPT that has taken the internet by storm, Patel said AI is only as good as “underlying” data and such models will get better because of more data — in the form of questions and responses — available to that particular AI model.

The AI bot has already crossed one million users in five days, its founders said. Internet users have been using the platform to debug codes, have debates and use it in writing blog posts.

The four main use cases of AI are interpretation, converse (conversational AI), automation and IT processes, and how you use it for augmenting intelligence and driving better decisions and automating HR functions, Patel said.

“Tech drives efficiencies with or without inflation. If any business tells you that we only think about efficiencies when there is inflation, they are lying. They look for efficiencies all the time,” Patel said on whether inflation would restrict tech spending only to certain pockets like AI and automation to save costs.

Patel was also all for regulations and practices in quality and trusted data sources that empower AI tools. “The fine line that we have got to draw is where are you regulating to ensure that bad things (misuses) don’t happen versus enabling growth through innovation,” he said.