India's IT firms shift to AI token-based pricing models
Bengaluru, May 13 -- As artificial intelligence (AI) takes on larger chunks of software work, more information technology (IT) services firms are working out new ways to charge for it. From AI tokens and usage-based rate cards to subscriptions and prepaid credits, large and mid-sized outsourcers are moving away from the traditional bill-by-the-hour model for work done by humans, as clients seek more predictable costs and outcome-based pricing for AI-led delivery.
Six months after two large IT services companies devised new billing structures for AI work, more large and mid-sized firms are adopting similar models, signalling that AI-linked pricing is becoming mainstream. EPAM Systems is factoring AI token costs into deal structures, while Tech Mahindra, India's fifth largest firm in the sector, is exploring pricing linked to token consumption.
Cognizant Technology Solutions Corp has now introduced a rate card for AI usage and Coforge Ltd launched a fixed monthly subscription for AI use. On the other hand, LTM Ltd (earlier LTIMindtree) allows clients to purchase a fixed number of coupons that are deducted each time an AI tool performs a task.
These new ways of charging clients for AI work come against the backdrop of advancements in technology. AI tools, once limited to automating tasks such as coding, can now handle entire processes such as creating marketing campaigns and predicting weather.
Nasdaq-listed Cognizant is the latest IT outsourcer to track AI usage through token consumption and base its rate cards on it. Tokens are small units of texts-including words, numbers and punctuation-that an AI tool can read. Companies pay for these tokens either directly to AI companies like Anthropic and OpenAI, or to their tech vendors who then pay these AI companies.
While Cognizant and Coforge are selling packages for fixed AI uses, LTM plans to sell credits to clients that get deducted upon AI usage, similar to tokens given in arcade stores....
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