Tata Consultancy Services has created a new unit focused on AI operations and named Amit Kapur as its head, according to a company memo seen by Reuters.

TCS is India’s largest IT services firm.

The new AI and services transformation unit will consolidate the company’s existing AI capabilities to expand work in AI-based solutions.

Kapur, a two-decade company veteran who previously led TCS’ UK and Ireland business, will take over the unit in September.

TCS is the first Indian IT company to set up a dedicated AI-focused business, following a similar move by a large US competitor in June.

Indian IT companies are increasing their focus on AI to attract client spending, which has been under pressure due to global economic conditions.

Industry analyst Pareekh Jain said IT firms view AI-led transformation as a key strategy for growth as demand remains subdued.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Indian IT companies are taking a different path to AI expansion than their global rivals

While global tech firms prioritized AI growth through acquisitions in 2024, Indian companies like TCS are choosing organizational restructuring and partnerships instead.

TCS becomes the first Indian IT company to create a dedicated AI business unit, following a similar move by a US rival in June 1. Meanwhile, Indian tech firms engaged in approximately 46 AI-focused partnerships in 2024, primarily with global hyperscalers and startups, rather than pursuing the acquisition-heavy strategies of companies like Accenture and IBM 2.

This approach reflects the different financial resources and market positions of Indian versus global firms. Despite having fewer acquisitions, Indian tech companies maintained growth and differentiation in AI solutions through these collaborative strategies 2.

TCS’s choice to promote insider Amit Kapur, who has 20 years with the firm and previously headed UK and Ireland operations, suggests they’re leveraging internal expertise rather than acquiring external talent 1.

2️⃣ The timing reveals defensive positioning as AI disrupts traditional outsourcing models

TCS’s AI unit formation comes just one month after announcing job cuts, highlighting the urgent need to adapt as AI threatens traditional outsourcing work 1.