Cognizant CEO Responds to Market Panic: “AI Is Not Magic”

Anthropic’s Claude Cowork triggered a sharp sell-off in IT stocks, but Cognizant CEO Ravi Kumar S countered fears, stressing that AI is not a “plug-and-play switch.” He explained that enterprise adoption is complex and gradual, requiring integration with legacy systems and human workflows. Despite market jitters, Cognizant posted strong Q4 results, highlighting steady growth from AI investments. Industry leaders like Vishal Sikka and Jensen Huang also dismissed the idea of AI instantly replacing software or human expertise, framing adoption as evolutionary rather than disruptive overnight.

Feb 5, 2026 0 35

Cognizant CEO Responds to Market Panic: “AI Is Not Magic”

Anthropic’s latest AI launch, Claude Cowork, sent shockwaves through global markets, wiping out nearly Rs 2 lakh crore in Indian IT stock value in a single session. Concerns over rapid automation and shrinking demand for traditional IT services fueled investor anxiety.

Amid this turbulence, Cognizant CEO Ravi Kumar S offered a counter-narrative, stressing that AI adoption is far more complex than headlines suggest and cannot instantly replace enterprise workflows.

“AI Is Not a Plug-and-Play Switch”

Kumar dismissed the notion that advanced AI tools can be deployed overnight to deliver immediate results. He argued that if AI were truly a “magic switch,” enterprises would already be seeing massive gains since the launch of ChatGPT three years ago. Instead, most value remains concentrated with infrastructure providers rather than flowing into business outcomes.

Why Enterprises Adopt AI Slowly

Enterprises operate within legacy systems, regulatory frameworks, and human-driven workflows. Kumar explained that integrating AI requires aligning business processes, physical operations, and human labor — making sudden, large-scale displacement unrealistic in the near term.

Market Panic vs Cognizant’s Steady Growth

Despite investor fears, Cognizant reported Q4 revenue of $5.3 billion, up 4.9% year-on-year, with full-year revenue rising 7% to $21.1 billion. Operating margins expanded by 140 basis points to 16.1%. These results suggest that Cognizant’s AI investments are beginning to deliver growth, even as clients remain cautious.

AI Adoption: Evolution, Not Overnight Disruption

Kumar emphasized that AI will evolve gradually, requiring bridges between deterministic systems and probabilistic AI models. This creates sustained demand for integration, transformation, and managed services rather than eliminating them.

Industry Leaders Push Back Against Fear Narrative

Cognizant’s stance echoes other tech leaders:

Vishal Sikka (ex-Infosys CEO) described generative AI as a “jagged frontier,” with uneven adoption across industries.
Jensen Huang (Nvidia CEO) argued that AI will enhance software use rather than replace it, freeing employees to focus on core strengths.

Interestingly, Cognizant itself partnered with Anthropic recently, planning to deploy Claude across 350,000 employees to accelerate coding, testing, documentation, and DevOps workflows.