Indian IT’s GenAI Lag

Infosys , TCS , Wipro , and HCLTech recently announced their third quarterly results for FY24 and showed good performance overall, surpassing earnings expectations, besides maintaining robust margins. However, when quantifying generative AI deals, revenue and investments, most showed little to no confidence .

On the contrary, rival Accenture has been vocal about sharing the numbers, having secured $450 million from its generative AI initiative, marking a 50% increase from the previous six months.?

Here’s a glimpse of the latest ‘GenAI’ quarterly report.

When compared to the previous quarter , this time as well, AIM noted a decline in the total headcount for many IT firms , along with signs of disparity in hiring freshers , as the companies are mainly focusing on training their existing employees, besides scaling workflow automation and digital initiatives.?

TCS : In FY24 Q3, the impact of generative AI on the company's revenue remains uncertain. It transitioned four generative AI projects from PoCs to contracts, and yet these initiatives haven't significantly influenced their earnings.?

“I don’t think generative AI is impacting [our revenue] at this time. Clients are trying to see what benefit it can bring. All are small projects,” said TCS chief operating officer N Ganapathy Subramaniam .

While Milind Kakkad , the chief HR officer, hinted at potential workforce reductions depending on market conditions, TCS also plans to hire 40,000 freshers in 2024. The company has successfully trained 150,000 employees in generative AI.?

Infosys : The company reported a substantial $3.2 billion in total contract value for the quarter, 71% being new acquisitions. However, CEO Salil Parekh has been hesitant about attributing any of it to generative AI ventures or discussing the specifics of the $1.5 billion failed AI deal .?

“AI has a lot of interest and traction, even if the revenue numbers are small,” said Parekh, emphasising Infosys’ strengths in this area, citing the integration of generative AI into service lines and training of 100,000 employees in generative AI.?

Wipro : Similar to Infosys and TCS, Wipro did not disclose specific revenue figures from its investments in generative AI in the FY24 Q3 earnings call .?

However, CEO Thierry Delaporte highlighted the growing importance of AI, saying it is now moving from the curiosity and experimentation stage to becoming vital to business strategy. “We can confidently say that every long-term large deal now has an AI component,” he said, adding that the company has trained 210,000 employees globally in AI and is integrating generative AI across its platforms.?

HCLTech : Unlike other Indian IT providers, HCLTech showed signs of early progress in generative AI , having signed 31 deals in GenAI – most of them in sub-million ticket sizes. “We are expecting them to ramp up in the coming quarters,” shared CEO C Vijayakumar , adding that there will be significant spending in data modernisation and cloud migration related to generative AI, alongside developing private stacks for LLMs.?

He believes that it’ll take a couple more quarters for holistic programs to fully materialise. So far, HCLTech has trained close to 42,000 people internally across different areas of generative AI, which is less than other Indian IT giants.?

Accenture, on the other hand, claims to have trained over 600,000 employees in AI. The company aims to double its deeply skilled data and AI practitioners from 40,000 to 80,000. Read how its GenAI numbers are signalling a shift for the Indian IT here .?

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