AI not a threat, but opportunity for IT services: TCS chairman N Chandrasekaran

India’s largest IT sector employer Tata Consultancy Services (TCS) expects to slow down hiring as AI agents work alongside human employees at scale.

Chairman N Chandrasekaran said that AI would alter hiring patterns across the IT industry. “If the company has half a million employees, the day is not far when the company will have half a million AI agents,” he said, adding that this would definitely lead to a decrease in hiring.

“Absolutely. The company will not be hiring the kind of numbers that it used to hire… because certain portions of the work in the current scheme of things will go to AI agents,” he said. However, once this transition has passed, AI would eventually create demand for new categories of talent, he added.


AI is expected to become integral to the entire business of TCS within the next five years and “100% of the revenue will have AI component” by the end of the decade, Chandrasekaran said.

TCS recorded a steady growth in AI revenue to $2.3 billion in annualised run rate in the fourth quarter of 2025-26 from $1.5 billion in the second quarter.

“I expect the AI-driven revenues to grow 100% year-on-year… By 2028 to 2030, 100% of the revenue will have an AI component,” Chandrasekaran said.

AI is not a threat to the IT services industry but the “most significant opportunity” in TCS’ history, he said at the company's 31st annual general meeting while addressing concerns that AI could reduce demand for traditional IT services.

Chandrasekaran said the market had misunderstood the relationship between AI and technology services. “Far from being a mortal threat, AI is the most significant opportunity yet for TCS and, in fact, for the IT industry as a whole,” he said.

“I am of the firm belief that every technology disruption enhances tech spending and is a significant opportunity for a company like TCS. But the magnitude of the possibility of AI is going to be so huge that in my firm belief it is the biggest opportunity TCS has had so far.”

Addressing shareholder concerns over the sharp decline in TCS’ share price, the chairman said investors should not mistake the current slowdown in growth across the technology sector as a sign of structural weakness. “Whenever the industry transition happens, the price-to-earnings multiples fall and this is one such phenomenon. And I think we have seen the worst of the last couple of years,” he said.

AI should be viewed as an “infrastructure of intelligence” that will expand rather than shrink technology spending, according to Chandrasekaran. He said the global enterprise IT market, currently valued at about $1.6 trillion, is expected to nearly double to $3 trillion over the next five to 10 years as companies modernise legacy systems, redesign business processes, build sovereign AI capabilities and deploy AI in physical environments such as factories and supply chains.

He also defended TCS' decision to invest in AI infrastructure despite its traditionally asset-light business model.

“An AI data centre is capital intensive, slightly different from the company's philosophy of asset-light model. This is a necessary thing to be able to play an end-to-end full stack AI solution game,” he said.

Chandrasekaran also reassured investors about the company's growth prospects, saying the management remains focused on returning to double-digit growth.

“Our own focus is to get to a double-digit growth on a year-on-year basis,” he said, adding that the pace of AI adoption by customers would be the key determinant.

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Commenting on the ongoing investigation into allegations of misconduct at TCS' Nashik facility, Chandrasekaran said an independent probe was underway and that the company would take strict action if wrongdoing was found. “The company has set up an independent investigation with third parties, a legal firm and an accounting consulting firm to look into the records, the procedures, the processes and the gaps,” he said.

The probe is being overseen by an independent committee chaired by TCS independent director Keki Mistry.

“The preliminary report that we have received shows that the company has not received any formal complaints through any channels, through the company channels, emails or any other form,” he said. Nonetheless, investigators are engaging with employees to ensure they can freely share information and help establish the facts.

Chief executive K Krithivasan said enterprises are moving from digital modernisation to becoming AI-powered organisations and increasingly need trusted partners. “This moment represents a once-in-generation opportunity for system integrators,” he said.

TCS has delivered more than 5,000 AI engagements and serves as the AI services partner for 130 of its top 139 clients. Chandrasekaran reiterated TCS' aspiration to become the world’s largest AI-led technology services company.

For 2025-26, TCS reported revenue of Rs 2.67 lakh crore, up 4.6% year-on-year, while net profit rose 8.8% to Rs 52,820 crore. Operating margin reached 25%, the highest level in four years, and the company returned nearly Rs 39,800 crore to shareholders through dividends and other payouts.

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