We're willing to cannibalize: TCS CEO on AI-led transition

Krithivasan sees long-term GenAI gains and calls revenue cannibalisation a sign of strength

- Varun Sood

Tata Consultancy Services Ltd says sharing the productivity savings from using Generative AI tools with its clients leads to some business loss, but this decline should be offset by more tech spending, which should eventually translate to more business for the country's largest information technology services firm.

Significantly, the Mumbai-based company said that spending on GenAI-related projects is in addition to the outsourcing budgets, which should assuage investors' concerns about whether the new technology was leading Fortune 500 companies to slash their tech spending.

"Depending on the kind of programme, we share the productivity gains with customers," said K. Krithivasan, chief executive officer of TCS, in an interview on Friday. "So yes, there is a net revenue reduction. (But) Clients see the savings and give more (volume of) work. So TCS remains in a very strong position." "Leveraging AI, we are willing to cannibalise. Sometimes willingness to cannibalise is a strength," he added.