Tata Consultancy Services (TCS), India’s largest IT outsourcer, has announced plans to build a 1GW AI data centre in India, marking a significant pivot in the company’s strategy. The move has divided analysts, with some expressing concerns about the potential impact on TCS’s revenue and operating margins. The company plans to invest $6.5 billion in the data centre over the next five to seven years, with the goal of becoming the world’s largest AI-led tech services company.
In contrast, other homegrown IT services companies such as Infosys, HCL Technologies, Wipro, and Tech Mahindra are sticking to their existing software services models, with a focus on embedding AI into their IT offerings. Infosys, for example, is doubling down on enterprise AI, while HCL Technologies is investing in IP-led solutions. Tech Mahindra is focusing on building sovereign AI models, and Wipro is embedding AI in its solutions for clients.
Analysts are split on TCS’s move, with some seeing it as a step in the right direction, while others point to limited synergies with the company’s existing service offerings and potential negative impacts on operating margins. HSBC analysts noted that the move is a small step in the context of the global AI investment onslaught, while Motilal Oswal Financial Services analysts pointed to the low technology intensity and limited overlap with TCS’s core services portfolio.
Infosys, on the other hand, is focusing on enterprise AI, with a goal of delivering projects on growth, cost, and core development. The company has delivered over 2,500 GenAI and 200 agentic AI client projects and has developed tailored vertical solutions via its flagship AI platform, Topaz. HCL Technologies is betting on selling its own intellectual property built on the intelligence layers of OEMs such as OpenAI and Nvidia, and has reported $100 million in AI revenue.
The AI strategies of the top five IT services companies in India will be closely watched, as they navigate tariff-related disputes, macro challenges, and visa uncertainties. The companies ended last quarter with revenues of $7.47 billion, $5.08 billion, $3.64 billion, $2.6 billion, and $1.59 billion, respectively, with a sequential expansion of 0.61%, 2.73%, 2.79%, 0.65%, and 1.41%, respectively. It remains to be seen whether their AI strategies will reap dividends in the face of these challenges.