TCS doubles down on AI, launches wholly owned subsidiary for AI data centres

India’s largest IT service firm, Tata Consultancy Services (TCS), in its quarterly financial report, has announced ambitions to become the “world’s largest AI-led technology services company”. To that effect, TCS will incorporate a wholly owned subsidiary in India to establish multiple AI and data centres of up to 1GW capacity, to provide infrastructure and technology-enabled services. 

Notably, in August, TCS created a new Artificial Intelligence (AI) and Services Transformation unit under the leadership of Amit Kapur, a TCS veteran who leads the company’s UK and Ireland business. 

TCS decided to skip the quarterly press conference for the Q2FY26 results announcements, owing to a clash with Ratan Tata’s anniversary. According to the press release, the Mumbai-headquartered company registered a revenue of ₹65,799 crore, up 3.7% on a quarterly basis and 7.6% year-on-year basis. The bottomline, however, stood at ₹12,075 crore down from Rs 12,760 crore in the preceding quarter. 

Additionally, TCS also announced the acquisition of Delaware-based ListEngage in a deal worth $72.8 million. ListEngage is a full stack Salesforce partner that specialises in Marketing Cloud, CRM, Data Cloud, Agentforce, and AI advisory services for enterprises. This acquisition is expected to strengthen TCS’ Salesforce capabilities, adding specialisations across the full range of Salesforce marketing tools. With this deal, the company will add over 100 professionals with over 400 Salesforce certifications to its Enterprise Solutions unit in the United States.

“I am pleased with our strong Q2 performance. I would like to thank all our employees for their dedication and excellence. We are on a journey to become the world’s largest AI-led technology services company,” said K Krithivasan, Chief Executive Officer and Managing Director. TCS’s growth momentum was led by Data, Cloud, and AI enterprise transformation, said chief operating officer Aarthi Subramanian. 

Ongoing economic challenges and global uncertainty have slowed revenue growth for large Indian IT companies, as many clients are holding off on new technology spending and projects, noted Biswajit Maity, Sr Principal Analyst at Gartner. Calling this period an “Uncertainty Pause,” where businesses across industries delaying investments due to economic and geopolitical risks. 

“Looking forward, global IT spending is expected to grow in 2025, especially with the ongoing demand for AI technologies, which should help TCS improve its market position. However, a recent rise in attrition rates could make it harder for TCS to maintain service quality and quickly scale up new projects if the trend continues,” he added.

It may be noted that in July, TCS announced that it would be laying off 2% of its workforce, affecting roughly 12,000 staffers. The mid- to senior-level employees will be hit by this decision. CEO Krithivasan at the time said that the layoff was due to skill mismatch rather than a direct impact of AI and automation.