New Delhi, June 3 (IANS) IT services major Wipro has identified the rapid adoption of artificial intelligence (AI) as a key business risk, warning that flawed algorithms, bias, regulatory uncertainties and unintended outcomes from AI systems could expose the company to legal, financial and reputational challenges.

In its FY26 annual report, the Bengaluru-based company said that while it is increasingly deploying generative and autonomous AI technologies across client solutions and internal operations, the technology remains uncertain and continues to evolve.

“The development, adoption, and use of AI technologies remain uncertain and evolving, and we may not be able to successfully develop, deploy, or scale AI-enabled solutions or realise the anticipated benefits,” Wipro said in the report.

The company cautioned that any inability to innovate or effectively integrate AI technologies, or any failure of such technologies to perform as expected, could adversely affect its competitive position, operational efficiency and financial performance.

Wipro noted that AI systems operating with limited human intervention raise the possibility of unintended outcomes and operational deficiencies.

Such shortcomings could result in project delays, failure to meet contractual service obligations, disputes with clients and potential loss of business.

The company also highlighted that the growing adoption of AI-driven automation and self-service tools by clients could reduce demand for certain traditional IT services, putting pressure on pricing, margins and the overall service mix.

According to the company, AI adoption is also increasing legal and regulatory risks.

Wipro said clients may demand stronger contractual safeguards related to AI deployment, including warranties, indemnities, audit rights and obligations concerning intellectual property ownership, data usage, cybersecurity, regulatory compliance and AI-generated outputs.

The company warned that if AI-enabled solutions cause harm to clients, their customers or other third parties, it could face regulatory scrutiny, litigation, financial liabilities, reputational damage and higher compliance costs.

Alongside AI-related concerns, Wipro underscored the growing threat posed by sophisticated cyberattacks.

The company said malicious use of advanced AI models to create deepfakes and AI-powered social engineering attacks has significantly expanded the cyber threat landscape.

As a result, both Wipro and its third-party vendors face heightened risks of data breaches, ransomware incidents and other cybersecurity attacks.

The company also cited geopolitical and macroeconomic uncertainties as significant challenges to future growth.

Wipro said changing tariffs and trade policies, geopolitical tensions and conflicts in regions where it or its clients operate could directly or indirectly impact business growth.

–IANS

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