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The Economic Times
IT deals face rejig as clients force new terms for AI gains
Corporate clients are taking proactive steps to adjust their IT service contracts within just two years of signing them, a significant shift from the previous trend of renegotiating only at renewal time. This change is driven by the rapid advancements in AI and the resulting productivity gains, necessitating a reevaluation of long-standing pricing models in a $315 billion software services industry. Executives and analysts suggest that the evolving landscape may lead to further changes in contractual agreements, as clients seek more flexible and adaptive terms.
MonitorConfidence: MediumShort term horizon
Published 30 Jun 2026, 02:30 UTC1 min read
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Summary
TL;DR
- Clients renegotiating IT contracts within 24 months of signing.
- AI productivity gains are influencing contract terms.
- $315 billion software services industry experiencing a shift.
- Traditionally, renewals prompted renegotiations.
- Executives foresee ongoing adaptations in deal structures.
Interesting facts
- The trend signifies a growing importance of AI in contract negotiations.
- Renegotiations are occurring even with ongoing engagements.
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