The AI ​​bubble will be short-lived, but the backlash will become stronger, NTT Data chief says

[MUMBAI] The head of Japanese IT company NTT Data said a potential artificial intelligence bubble will deflate faster than in past technology cycles, but will give way to an even stronger rebound as corporate adoption catches up with infrastructure spending.

CEO Abhijit Dubey told the Reuters Global Markets Forum in an interview that despite concerns over supply chains, the direction is clear.

“In the medium to long term, there is absolutely no doubt that AI is a long-term, large-scale trend,” he said.

“Over the next 12 months, I think we’ll see a bit of normalcy. The bubble won’t last long and[AI]will only come out stronger from there.”

Demand for computing still outstrips supply, and over the next two to three years “the supply chain will pretty much be taken care of,” he said. He added that pricing power is already tilted toward chipmakers and hyperscalers, reflecting their overvaluation in the public market.

AI has sparked the biggest technological revolution since the advent of the internet, driving trillions of US dollars in investment and spectacular stock market gains. But it has caused a shortage of memory chips, drawn scrutiny from regulators and increased uncertainty about the future of jobs.

Dubey, who is also the company’s chief AI officer, said the company has begun rethinking its hiring strategy as AI reshapes the labor market.

“Obviously there will be an impact… over a period of five to 25 years, there will probably be dislocations,” he said. However, it added that NTT Data continues to hire across locations.

Speakers at the Reuters NEXT conference in New York discussed how AI could transform jobs and employment growth.

May Habib, CEO of AI Startup Writer, said clients are noticing a slowdown in headcount growth.

“When you sign a contract with a customer and you call the CEO to start a project, you’re like, ‘Wow, how quickly can we kill 30 percent of the team?'” she said.

Still, a survey of global employees released in November by PwC suggests that the reality of using generative AI still doesn’t align with board expectations.

Despite the average wage premium for workers with AI skills at 56%, more than double last year, daily usage of GenAI remains “substantially lower” than widely touted by management, PwC said.

PwC also warned of a widening skills gap, with around half of non-executives reporting access to training resources, compared with around three-quarters of senior executives. Reuters