Mark Franklin 0.5 2 ideas

Foreign investors sold $110 billion rupees of Indian IT stocks in early February. Mark Franklin notes that business models predicated on "outsourcing relatively commoditized software development" are at risk. This is the "Second-Order" AI trade. As AI writes code, the need for massive human labor arbitrage in coding (the core business of Indian IT majors) diminishes. Companies will "self-fund" AI initiatives rather than outsourcing. SHORT Indian IT Services (Infosys, Wipro) as they face an existential threat from Generative AI productivity gains. These companies may successfully pivot to becoming AI implementers, retaining clients through legacy relationships.