Company: INFY
Filing Date: 2025-07-01
Form Type: 20-F
Source: 0000950170-25-091925
Chunk: 12

Company: Infosys Ltd
Filing Date: 2025-07-01
Form: 20-F
Item: Item 3
Chunk 12
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Additionally, macroeconomic conditions, changes in tariffs, trade restrictions or geopolitical uncertainties and any economic downturn may cause us to reduce our expenditure on ideating, incubating, developing and marketing new service offerings, which may affect our long-term growth prospects.

Our use of AI technologies may not be successful and may present business, financial, legal, and reputational risks.

The proliferation of AI continues to significantly impact our industry, and we believe our ability to compete in this space will be critical to our financial performance. Our use of AI, including generative AI and agentic AI, in our client offerings and our own internal operations is pervasive and continues to increase as we advance our research and development of the technology. We have incurred and will continue to incur significant costs to develop and operate our AI capabilities, including ensuring compliance with evolving AI and automation laws and regulations. Failure to develop and implement effective AI solutions or to compete in the AI market as efficiently as our competitors may prevent us from recouping our investments into AI and could negatively impact our financial performance, competitive standing, business, and reputation.

AI technologies are complex and rapidly evolving, and we face significant competition, including from our own clients, who may develop their own AI-related capabilities, which in each case, can lead to reduced demand for our services. Additionally, as these technologies evolve, some professional services currently performed by our people may be replaced by automation, which could have a material adverse effect on our business, results of operations and financial condition.

During the fiscal year, we built our first set of small language models for banking, IT operations, cybersecurity and to provide a robust foundation for implementing and scaling enterprise AI. As more of our services imbibe AI, we may need to plan for additional investment into initiatives like Responsible AI to create appropriate safeguards for handling the use of our data, including customer data processed by us. AI may create content that appears correct but is inaccurate or flawed, which may expose us to brand or reputational harm, competitive harm or legal liability if we, our customers or others rely on this flawed content to their detriment. Additionally, AI tools might utilize content subject to third-party restrictions, potentially hindering usage and causing liability, including through IP infringement, cybersecurity breaches and data protection violations. In addition, the development,

adoption, and use of AI technologies are all still in their early stages and ineffective or inadequate AI development or deployment practices by us, our clients, or third parties with whom we do business could result in unintended consequences, including employees relying on inaccurate output, unauthorized