Agentic AI Reshapes IT Services and Fuels Deepfake Concerns

The rise of agentic AI is creating a disruptive wave across multiple sectors, notably impacting the IT services industry and exacerbating the threat of deepfakes. This shift is altering traditional business models, driving down costs, and simultaneously increasing the sophistication of fraudulent activities.

Agentic AI Disrupts IT Services Billing

Agentic AI is fundamentally changing the economics of the IT services sector, challenging the established seat-based billing model and compressing total contract values (TCV). The emergence of tools like Claude Cowork and OpenAI’s Agent platform are accelerating this trend. Over the past 24 months, blended billing rates have steadily declined in both the US and India for roles including web and mobile developers, full-stack engineers, remote desktop support, and cybersecurity professionals. Even traditionally stable technology consulting rates are softening, decreasing from a range of $141-$182 per hour to $138-$181 in the US.

Clients are now demanding significant productivity-linked discounts, which are being reinvested into expanding project scope or developing new AI leverage cases. The impact isn’t solely on rates. the number of billable hours per unit of work is also decreasing as AI streamlines processes. According to Jimit Arora, chief executive of Everest Group, whereas rates may spot a modest decline, the more significant issue is the reduction in TCV for comparable project scopes, with productivity gains ranging from 30-70% on baseline fees.

AI-Native Startups and Lean Operations

AI-native startups are achieving revenue milestones with remarkably lean teams. AI tools are reducing the need for large engineering, support, and sales departments, allowing companies to scale more efficiently. Voice AI startup Yoodli AI, for example, reports an annual recurring revenue (ARR) per employee of $300,000 to $400,000, significantly higher than the typical SaaS benchmark of $175,000. Yoodli AI operates with around 50 employees and has seen its valuation triple to approximately $300 million in six months, raising close to $60 million in funding.

Startups are also tracking token consumption as a metric for scale, as AI usage replaces tasks that previously required more personnel. This is contributing to a “seed-strapping” approach, where companies raise an initial funding round and then grow primarily on revenue, aided by India’s Digital Public Infrastructure (DPI) which reduces onboarding and compliance costs. Indian startups have a competitive advantage due to SMEs prioritizing product performance and price over lengthy sales cycles common in enterprise environments.

India’s Response to Deepfakes and AI Regulation

India is actively addressing the growing threat of deepfakes and AI-generated misinformation with new IT Rules 2026. These amended rules, notified on February 10, 2026, and taking effect on February 20, 2026, require intermediaries to update their policies and technological systems within 10 days. The rules introduce a clear legal definition of “synthetically generated information,” encompassing any artificially created or altered audio, visual, or audio-visual content designed to appear authentic.

The regulations mandate that social media platforms like Facebook, Instagram, and YouTube clearly label all AI-generated content with embedded identifiers. The Unique Identification Authority of India (UIDAI) is also considering a seed fund to support startups developing technology and services around the Aadhaar ecosystem, focusing on areas like fraud detection, biometrics, and digital identity.

Recent Funding and Financial Updates

Several companies have recently secured funding: Care.fi, a healthcare-focused fintech platform, raised $8 million in a mix of equity and debt, led by July Ventures. Sanitary waste recycling startup PadCare Labs raised $3 million in a funding round led by Zerodha cofounder Nithin Kamath’s Rainmatter. Udaan, however, reported a 20% decrease in operating revenue to Rs 4,561 crore in FY25, alongside a 37% decline in net loss to Rs 1,055 crore (based on regulatory filings in Singapore).

Key Takeaways

• Agentic AI is driving down costs and changing billing models in the IT services industry.
• AI-native startups are achieving higher revenue per employee due to increased efficiency.
• India is proactively regulating AI-generated content to combat deepfakes and misinformation.
• Funding continues to flow into innovative startups in the fintech and sustainability sectors.