Relevance: GS III (Awareness in IT & Indian Economy) | Source: The Indian Express / Anthropic Release
1. The Context: A Market Shiver
The release of new plugins by US-based AI firm Anthropic (a rival to OpenAI) recently caused a significant drop in the Nifty IT index. This market reaction signals a deeper anxiety: the transition of Artificial Intelligence from a “Chatbot” to an “Agent”.
2. What is “Agentic AI”?
To understand the threat, we must distinguish between the two types of AI:
- Generative AI (Old): Acts like a Smart Assistant. You ask a question, and it gives an answer or writes a draft. The human still has to execute the work.
- Agentic AI (New): Acts like an Autonomous Employee. It doesn’t just talk; it does.
- Capability: It can independently plan workflows, browse the web, write and test code, analyze datasets, and review legal documents with minimal human supervision.
3. Why is Indian IT Worried?
The Indian IT sector has historically thrived on “Labor Arbitrage”—hiring large teams of engineers to do routine coding and maintenance at a lower cost than in the West.
- The Threat: Agentic AI threatens to automate these “entry-level” jobs. If an AI agent can write, debug, and deploy code faster and cheaper than a human team, the traditional “Service Model” (billing by the hour for human effort) faces an existential crisis.
- The Shift: Code is becoming a “Commodity”. The value is shifting from writing code to architecting solutions.
UPSC Value Box
| Concept / Term | Relevance for Prelims |
| Agentic AI | AI systems designed to pursue complex goals with limited direct human supervision. Unlike passive chatbots, they have “agency” to act upon the world (e.g., booking tickets, executing software tasks). |
| Labor Arbitrage | A business strategy of moving work to locations where labor costs are lower (e.g., US companies outsourcing to India). AI is now becoming the ultimate “low-cost labor,” challenging this model. |
| IndiaAI Mission | A central government initiative with a budget of over ₹10,000 crore to bolster India’s AI ecosystem, focusing on computing infrastructure and datasets to ensure India remains a creator, not just a consumer, of AI. |
Q. With reference to the evolution of Artificial Intelligence, the term “Agentic AI” is best described as:
- AI systems that are strictly limited to generating text and images based on user prompts.
- AI systems capable of autonomously planning and executing multi-step workflows to achieve a broad goal.
- A government initiative to license AI developers in India.
- Robotic process automation software used exclusively in automobile manufacturing.
Correct Answer: (2)
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