Tata Consultancy Services (TCS) is charting a bold new course, committing nearly $7 billion to AI data centres - a move unprecedented in the company's history. In an interview with The Times of India, CEO K. Krithivasan shed light on how this pivot reflects TCS's ambition to reshape its future beyond traditional IT services while retaining a strong India-first perspective.

“This initiative is about positioning TCS as the world's largest AI-led services company,” Krithivasan said.“It's built on five pillars: transforming our internal systems and culture, enhancing the services we deliver to clients, upskilling our workforce, leveraging AI to disrupt value chains, and deepening our engagement with the wider ecosystem.”

By building AI data centres, TCS aims to offer end-to-end services - from AI cloud infrastructure to model training and inferencing. While these facilities open doors for global clients, the project also carries a significant India angle, reinforcing domestic capabilities even as TCS strengthens its global footprint. Funding for this venture will be a mix of equity and debt, with strategic investors enabling the company to maintain flexibility in shaping growth and partnerships.

TCS's aggressive expansion comes amid a challenging market. The company reported consecutive quarters of sluggish performance, reflecting weak client demand and a cautious approach to discretionary spending.“We had a dip in Q1, but Q2 shows improvement,” Krithivasan noted.“Most industry verticals, except consumer business, have turned positive. BFSI has shown steady progress, and geographies are performing well, with the UK being an exception due to client-specific pricing issues.”

The CEO also addressed the impact of Global Capability Centers (GCCs) and nearshoring models.“GCCs are now collaborators as much as they are competitors. We're exploring opportunities to support what they're building in India,” he said.

A key part of TCS's global strategy involves reducing dependence on H-1B visas while increasing local hiring in the US. Currently, the company employs around 11,000 H-1B workers within a 32,000–33,000 strong US workforce, but only about 1,000 are fresh approvals this year.“Our focus is on hiring locally and investing in training,” Krithivasan explained.“Nearshoring models, like in LATAM, show how hiring within the same time zone benefits clients and strengthens local talent.”

Employee morale remains a priority amid restructuring. About 6,000 employees have been released with fair severance, targeting a 2% workforce reduction to address skill gaps.“This isn't about cost-cutting or AI replacing people,” the CEO emphasized.“It's about ensuring alignment between business needs and individual capabilities. We onboarded 19,000 new employees this quarter, showing our commitment to growth.”

AI adoption is becoming pervasive across TCS projects, making nearly all initiatives AI-led. Krithivasan said it's difficult to quantify AI revenue because almost every project now involves AI to some extent, enhancing productivity, stability, and outcomes for clients.

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