Artificial intelligence (AI) contracts are unlikely to follow the traditional multiyear outsourcing model as changing costs and continuous innovation make businesses reluctant to commit to long-term pricing arrangements, LTM chief executive officer and managing director Venu Lambu has said.
AI engagements are expected to be shorter and iterative, with technology-services companies securing multiple contracts over several years as enterprises expand technology adoption, Lambu told Moneycontrol in an interview.
"With the cost of AI changing so rapidly, I don't think customer is in a hurry to go and lock in price for the next three to five years," Lambu said.
The shift could change how IT-services companies approach large deal bookings, which have traditionally been an important indicator of revenue visibility.
Unlike conventional outsourcing arrangements, where companies commit to multiyear contracts with predefined scopes and pricing, AI adoption is evolving rapidly, making it difficult for enterprises to predict costs and returns over extended periods.