TCS aims to become world's largest AI-led tech services firm

With an aim to become the world's largest AI-led technology services firm, Tata Consultancy Services has announced a new business entity to build a 1GW capacity AI data centre in India.

Though the company did not share investment details, K Krithivasan, Chief Executive Officer and Managing Director, TCS said in an analyst call that from a CapEx perspective, they have set a target of 1 GW, but they will be doing it in phases. "We expect to achieve one gigawatt over a period of five to seven years. Roughly about every 150 megawatt would be about a billion dollars. So it's not that we are going to put all the money in year one. And we also clarify that this would be a combination of equity and debt," he explained.

The company will also bring in finance partners for the equity. This announcement by TCS comes at a time when many US-based AI firms are launching their centres in India. With clients expecting Artificial Intelligence (AI) in every deal, IT services firms have now started upping their game in AI and also upskilling their employees in AI.

The CEO also said that they have been engaging with clients in understanding the challenges they are facing in scaling AI and collaborating with technology partners and academia to unlock the true potential of this technology. "TCS will become the largest AI-led technology services company enabling business, government and society. This transformation is currently underway. We are committed to making significant investments towards transforming ourselves in order to realize our vision," he added.

Meanwhile, Brokerage Jefferies said the 1GW plan by TCS could place TCS among the country's top-5 data center operators. And that this could involve a capital expenditure of about $5 billion.

The company will focus on five pillars including building solutions and scaling AI for connected intelligence, redefining all services in a human plus AI services model. The company has established an AI and services transformation unit for this purpose. "We are also building a future-ready talent model. We are investing in future ready skills, embracing new ways of working and recruiting top talent locally in the market we operate. We are redesigning business value chains for every industry. We are also investing in development of innovative cross industry solutions, leveraging AI and also expanding our AI ecosystem plan," the CEO further added.