New Delhi, July 5 -- Persistent Systems' $1.4 billion acquisition of German software engineering firm Nagarro is the latest in a series of deals by Indian information technology (IT) companies. It follows Coforge's $2.35 billion purchase of Encora. Their larger peers like Tata Consultancy Services (TCS), Infosys, Wipro and Cognizant have also announced acquisitions in the past few quarters. Unlike earlier consolidation cycles, this one is driven by artificial intelligence (AI). As AI automates coding, testing and other routine software work, the traditional IT services model based on billing for headcount is under pressure. Companies are acquiring AI capabilities and specialised talent, but these deals also bring risks.

Indian IT compani...