Tata Consultancy Services (TCS), India's largest IT services company, has set its sights on becoming the world's preeminent AI-led technology services provider. In a significant disclosure, the Tata Group firm announced that its artificial intelligence services division has achieved an annualised revenue run-rate (ARR) of $1.5 billion. This marks the first time TCS has publicly quantified the scale of its AI business.
Five-Pillar Strategy for AI Dominance
Outlining the ambitious vision, TCS CEO K Krithivasan presented a comprehensive five-pronged strategy to anchor the company's growth. "Our quarter-on-quarter growth on AI alone has gone up by over 16.3%," Krithivasan told analysts, highlighting that AI is now expanding faster than the rest of TCS's portfolio. The strategic pillars include: internal AI transformation, reimagining services with AI, building future-ready talent, making AI tangible for clients, and creating a full-stack AI ecosystem covering infrastructure, platforms, and partnerships.
The CEO emphasised that mergers and acquisitions will be crucial for enhancing capabilities. This was recently demonstrated by TCS's $700 million acquisition of Coastal Cloud, a Salesforce consulting firm, which stands as its largest purchase ever. Earlier, in October, the Mumbai-based giant acquired US-based ListEngage for $72.8 million.
Widespread Demand and Productivity Gains
The demand for AI-driven solutions is robust across key sectors like BFSI, life sciences, and manufacturing. TCS has already executed close to 5,500 AI engagements for its global clientele. In some projects, guiding customers along the AI "autonomy curve" has yielded productivity improvements of 25-30%, even as TCS deliberately cannibalised parts of its own revenue streams.
"Automation has always been central to how we deliver services. But with this AI, we are shifting from autonomous to autonomy," explained Chief Operating Officer Aarthi Subramanian. She added that the synergistic human-plus-AI model is key to driving productivity at scale. To empower its workforce, TCS has equipped 97% of its developers and engineers with AI coding assistants.
Boosting Advisory and Platform Innovation
TCS is actively strengthening its consulting and advisory practice by hiring experienced professionals. Krithivasan sees the current period as the right window to evolve an advisory model deeply driven by AI analytics, leveraging the company's core technological strength.
On the product front, TCS recently launched an AI upgrade for its flagship banking platform. The 'TCS BaNCS AI Compass' integrates machine learning, deep learning, Generative AI, and pre-built agents to help banking and securities clients adopt responsible AI tools and practices.
With a clear strategy, quantified growth, and aggressive capability building through hires and acquisitions, TCS is positioning itself at the forefront of the global AI services revolution, aiming to translate its current $1.5 billion ARR momentum into market leadership.
