AI Services Emerge as Major Growth Driver for TCS, Revenue Touches $1.5 Billion

Tata Consultancy Services (TCS) CEO K Krithivasan has said that the company’s annualised revenue from artificial intelligence (AI) services has reached $1.5 billion, marking a strong quarter-on-quarter growth of 16.3%. He added that more than 85% of TCS clients with revenues exceeding $20 million are now leveraging the company’s AI capabilities.

Speaking at the TCS Analyst Day in Mumbai on Wednesday, Krithivasan said the company is undergoing a large-scale internal transformation to embed an “AI-first culture” across the organisation. “Every time we take on a project or engage with a customer, the first question we ask is what AI can do, and whether it can do it better than existing approaches—even if it cannibalises our own revenue,” he said, describing this mindset as giving AI the “first right of refusal”.

Alongside cultural change, TCS is also building and scaling its own AI solutions. Krithivasan noted that AI has become a core growth engine across the company’s portfolio, with AI services growing 38.2% year-on-year in constant currency—significantly faster than other segments such as cloud, cybersecurity, enterprise solutions, interactive services, and IoT and digital engineering. Overall, TCS reported $11 billion in annualised revenue across these digital and technology-led services.

While Indian IT peers have largely refrained from separately disclosing AI revenues, global competitors such as Accenture have moved faster in highlighting their AI progress. Accenture’s multi-year $3 billion investment in generative AI announced in FY23 has begun to yield results, with revenue from generative and agentic AI tripling to $2.7 billion in FY25 and bookings nearly doubling to $5.9 billion. Accenture has also grown its security business to $10 billion in FY25 from $700 million a decade ago.

TCS outlined five strategic pillars anchoring its AI-led transformation. These include internal transformation by becoming its own first customer, AI-led reimagination of service lines, large-scale talent transformation through reskilling and new delivery models, reimagining customer value chains to drive end-to-end business transformation, and strengthening ecosystem partnerships through collaborations, acquisitions and co-creation.

“The shift from digital to AI represents a massive opportunity for enterprises and for TCS. Our deep customer relationships, execution discipline and strong balance sheet position us well to lead this transformation,” Krithivasan said.

TCS Chief Operating Officer Aarthi Subramanian highlighted the company’s focus on talent development, noting the launch of a personalised AI learning coach powered by generative and agentic AI. The system assesses employees’ skill levels, aspirations and goals to provide customised learning paths across technical and soft skills. She said the initiative is already delivering strong outcomes.

Subramanian added that around 1.8 lakh TCS employees now possess higher-order AI skills, nearly double the number from last year. She also emphasised the importance of role transformation, stating that every function—from sales to delivery—is becoming increasingly AI-centric. New initiatives such as the AI Dojo programme and roles like rapid-build engineers have been introduced, although she stressed that for mid-level tasks, AI agents continue to support human decision-making rather than replace it.