What happened
EPAM Systems and Tech Mahindra are transitioning IT services billing from traditional time-and-materials to models incorporating AI usage, specifically AI token consumption. EPAM CEO Balazs Fejes confirmed plans to factor token prices into commercial models, while Tech Mahindra CEO Mohit Joshi detailed pricing for "digital labour" based on token consumption. EPAM reported $105 million in AI-native revenue for Q4 2025, projecting $600 million by year-end 2026.
Why it matters
IT services procurement models are shifting as AI-driven productivity gains invalidate traditional time-and-materials billing. Procurement teams and CTOs must prepare for hybrid models combining platform subscriptions, consumption pricing for AI workloads, and outcome-based fees. Volatile AI token pricing currently complicates fixed-price contracts, but the industry is moving towards integrating these costs directly into service agreements, redefining value metrics beyond human hours.
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