Bengaluru, July 27 -- At a time when India's $300-billion information technology (IT) services industry grapples with slowing growth, it is discovering that the biggest immediate impact of artificial intelligence (AI) is not necessarily higher revenues and improved productivity, but lower prices.

"The slowdown in the market and the revenue compression are creating intense competitive pressure, which is driving prices down and putting pressure on margins," said Peter Bendor-Samuel, founder of Dallas-based IT advisory firm Everest Group. "This trend looks like it will continue for several years."

Clients' demand for AI-driven productivity gains has triggered an intense price war as technology companies of all sizes slash prices to win dea...