As AI rocks tech boat, ER&D may promise an island of calm

Amid the tempest of AI rocking the technology world, a niche segment maybe emerging as an island of calm.

- Jas Bardia [e-mail]

Anthropic's launch of 11 AI tools on 30 January led to concerns about AI's impact on IT firms.

Technology companies that build hardware and the software to go with it will suffer less from disruption, multiple company executives and technology analysts said, since much of their work goes into researching and building physical products for sectors ranging from aerospace to automobiles. The complexity of integrating mechanical engineering with software creates a layer of complexity that AI models cannot yet replicate.

“Engineering, research and development (ER&D) firms are least likely to be impacted as these firms have lower coding-led revenue in their mix vs pure-play IT services,” said ICICI Securities analysts Ruchi Tech firms making hardware will suffer less AI disruption.