Editor’s note: This is AI Impact, Newsweek’s weekly newsletter where each week, we will explore how business leaders are unlocking real value through artificial intelligence.
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Core Intelligence
Effort No Longer Defines Value
The economics of IT services are starting to shift in a way that’s hard to ignore. The amount of work required to build software is falling, even as the value of that software rises. That imbalance is beginning to reshape how services are priced, delivered and measured.
“If you believe that coding is going to become abundant, and it’s already on that path,” Frank D’Souza, co-founder and managing partner at Recognize and former CEO of Cognizant, said during Newsweek’s recent “AI Impact Forum” webinar, “you would expect the value associated with coding to become significantly less.”
The value of the output, however, is increasing.
That paradox changes the foundation of the services model. Revenue has long been tied to inputs—hours worked, team size and effort expended. As AI compresses the time and labor required to produce software, that linkage becomes harder to sustain.
Work that once required large teams can now be done with fewer people, faster. As throughput increases, pricing based on effort becomes increasingly disconnected from the value delivered.
“You’re going to have to move away from input-based pricing to output-based pricing,” D’Souza said.
This goes beyond pricing, though. It reflects where value now sits inside the work itself.
As execution becomes cheaper, value moves upstream. Defining the problem, setting direction and ensuring systems are reliable, secure and work as intended take on greater importance.
“In the past, we provided the hands,” D’Souza said. “In the future, we have to provide the head.”
What clients are really buying is certainty. “They’re not buying effort,” he added.
The structure of work is changing as well. Tasks can be broken into smaller components, executed in parallel and completed more quickly, reducing the need for large teams.
That combination—more work, fewer people required for each project—creates both opportunity and pressure. Firms that adapt can expand output and move faster. Those that remain tied to labor-heavy models risk falling behind.
“This is not something you can ease into over time,” said Dr. Ranjit Tinaikar, former CEO of Ness Digital Engineering and host of the “AI Impact Forum” webinar series. “You have to make decisions.”
The urgency reflects the scale of what’s happening. AI is not simply improving how services are delivered. It is redefining how they are priced, how they are structured and where value is created.
In that environment, the central question is no longer how much work a firm can deliver, but how much value it can create—and how that value is proven.
You can watch the discussion and read the full article here: Frank D’Souza: AI Is Breaking the IT Services Model.
Upcoming Webinars
How Is AI Reshaping Health Care Delivery and Strategy?
Health systems are entering a new phase of transformation as artificial intelligence moves from experimentation into everyday clinical and operational decision-making.
In this edition of Newsweek’s AI Agenda, “How Is AI Reshaping Health Care Delivery and Strategy?”, taking place Monday, April 27 at 3:30 p.m. Eastern, Suraj Srinivasan, Harvard Business School professor and member of the Newsweek Advisory Board, sits down with Dr. Tom Mihaljevic, CEO and president of Cleveland Clinic, for a conversation on how one of the world’s leading health organizations is integrating AI into care delivery—and what that shift means for leadership priorities, operational strategy and the future of health care.
Will Today’s Software Companies Become Tomorrow’s Services Companies?
As artificial intelligence begins to take on more of the tasks traditionally performed by humans, a deeper question is coming into focus: what happens to “work” itself—and who, or what, delivers it?
In this session of Newsweek’s AI Impact Forum, “Will Today’s Software Companies Become Tomorrow’s Services Companies?”, taking place April 30 at 11 a.m. Eastern, Dr. Ranjit Tinaikar, host of the series, sits down with Tiger Tyagarajan, former CEO of Genpact and now a senior advisor and board member to technology and services companies, as well as private equity and venture capital firms, for a strategic conversation on how AI is blurring the line between software and services—and what that shift means for business models, competition and the future of work.
Prompt Injection
What’s one recent insight you’ve learned about AI?
“There is a growing understanding of how AI can play a role for care teams at large in clinical oversight. There are ways to develop algorithms to identify trends that are much more sensitive and identified earlier, allowing us to intervene in a much more proactive way.
The engagement of patients can be recognized in real time with the support of AI as well. Encouraging patients in keeping them engaged is a constant battle and developing AI tools that assist our care teams in seeing what they need to see when they need to see it allows for us to deliver the right care at the right time.”
Have your own lesson to share? Email us at: ai.newsletter@newsweek.com
Run Log
AI use case of the week
By Adam Mills
Finding the right citation can sometimes take longer than understanding the underlying research. For Josh Meier, a senior generative AI author at Pluralsight, an online education company, building course material can mean digging through academic journals and databases to locate a source that supports a specific point. That process can take hours.
AI has become a first step in that workflow. Instead of starting with traditional search, Meier prompts models to retrieve relevant papers from specific databases or to break down dense research into high-level explanations. The output isn’t treated as final. He reviews the sources, verifies the details and uses the results to guide further investigation.
The immediate benefit is speed. What once required extended searching can be narrowed quickly, freeing up time for analysis and course development. More important is how the work is structured. By introducing AI into the process, Meier adds a layer that can surface connections or sources he might not have encountered through manual search alone.
“I don’t need the AI to research for me,” he said. “But it enables me to access research more quickly, efficiently and equitably.”
Used this way, AI functions less as a replacement for research and more as a retrieval layer—accelerating the process of finding relevant information while leaving verification and judgment with the human.
Have an AI use case to share with us? Email us at: ai.newsletter@newsweek.com
Context Window
■ Nissan is repositioning its future lineup around “AI-defined vehicles,” a step beyond software-defined vehicles, aiming to bring AI-driven safety, autonomy and in-car intelligence to 90 percent of its models, part of an effort to regain competitiveness amid rising pressure from Chinese automakers and a rapidly shifting global market. [Newsweek]
■ U.K. lawmakers were told that China is backing global AI governance efforts, while the U.S. is pursuing a more deregulated, competitive approach, pointing to diverging strategies around regulation and international coordination. [The Guardian]
■ Anthropic is opposing an Illinois bill backed by OpenAI that would shield AI companies from liability if their systems are used to cause large-scale harm, exposing a growing divide between leading AI labs over how responsibility and accountability should be handled. [WIRED]
■ A Florida-based lab is using artificial intelligence to help utilities anticipate outages, identify weak points in the power grid and restore power more quickly during storms, with the goal of improving reliability and response times. [WFTV]
■ Tech employment has declined across major economies since 2022, with more than 500,000 roles “missing” in the U.S. alone, but interest rates, outsourcing and post-pandemic corrections appear to be key drivers alongside AI, as demand for tech skills expands into other industries. [The Economist]
■ Santa Clara University is launching a new AI center backed by a nearly $25 million donation to advance applied research in areas including health care, robotics and human-computer interaction, while expanding academic and industry collaboration around AI. [GovTech]
Transfer Protocol
Tracking executive moves across the AI landscape
Sony SungChu, previously head of science and innovation at Businessolver, has been appointed chief AI officer at Businessolver, where he will lead the company’s artificial intelligence strategy and integration of AI across its platform, operations and customer experience.
Christie Mealo, previously senior vice president of AI products at 90NORTH (IPG Health) and a former leader of engineering and product teams at CVS Health, has been appointed chief AI officer at Medical Knowledge Group, where she will oversee the development of AI-driven capabilities across its life sciences and health care offerings.
Sunil Senan, previously senior vice president and global head of data, analytics and AI at Infosys, has been appointed global chief executive officer at CEI, where he will guide the company’s shift to an AI-first enterprise strategy and next phase of growth.
Damian Leach, previously global chief information officer at Seaco, has been appointed chief AI and digital officer at Vistra, where he will lead the integration of artificial intelligence and digital capabilities across the company’s global operations.
Julie Irish, previously chief information officer at Couchbase, has been appointed chief information officer at Alteryx, where she will lead the company’s global IT organization and technology strategy to support growth and its AI-driven analytics platform.
Magic Moment
What’s the most fun or unexpected way you’ve used AI lately?
“The most unexpected shift in my recent workflow has been the total transformation of video storyboarding and wardrobe design. Gone are the days of tedious ‘franken-shopping’ found assets from the internet. Now, with just a few photos of our talent and their outfits, I can generate cohesive, professional wardrobe looks on the fly.
To build out our scenes, I simply prompt the AI with the talent and our ONYX RCR 80V, describing the environment to generate high-fidelity frames. The real ‘magic,’ however, is the ability to create animatic motion storyboards. By turning these stills into 5 to 10 second clips, I can test the visual flow against our music selection instantly.
In the past, animating a storyboard would have been considered a massive waste of time and resources. Now, I can deliver a full animatic, edited to the beat of the soundtrack, in less than half a day.”
Experience some AI magic? Tell us about it at ai.newsletter@newsweek.com
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