TCS unveils mega AI plans, acquires US-based ListEngage for $72.8 million

Tata Consultancy Services (TCS) plans to set up a new business entity to build world-class AI infrastructure, including a 1 GW AI data centre in India.

Tata Consultancy Services Ltd. has announced strategic AI investments in its endeavour to become the world's largest AI-led IT services company. That, after its second-quarter revenue rose and net profit fell on global headwinds.

TCS plans to set up a 1 GW AI data centre in India. (Reuters)

India's largest IT services company plans to set up a new business entity to build world-class AI infrastructure, including a 1 GW AI data centre in India, according to a statement on Thursday.

“We are on a journey to become the world’s largest AI-led technology services company,” TCS CEO K. Krithivasan said in a statement on Thursday. “Our journey is anchored in bold transformation across talent, infrastructure, ecosystem partnerships and customer value.”

“The investments including the building of a world-class AI infrastructure business demonstrate our commitment to this transformation.”

TCS-ListEngage Acquisition

TCS has acquired 100% stake in ListEngage, a US-based full-stack Salesforce partner, for $72.80 million in cash, to boost its Agentic AI capabilities.

The deal is symbiotic, for it gives ListEngage access to TCS's customer base while TCS adds 100 skilled professionals with 400 Salesforce certifications to its enterprise solutions unit in the United States. Additionally, the acquisition supports TCS's inorganic growth in AI, cloud services, cybersecurity, digital engineering and enterprise solutions.

“This is more than an acquisition—it’s a growth platform,” ListEngage CEO Altaf Shaikh said in a statement. “Together, we will set a new benchmark for how enterprises unlock the full value of Salesforce… I’m particularly excited about the AI opportunities ahead.”

Established in 2018, ListEngage helps in digital-marketing transformation of clients through Salesforce platforms and AI advisory services. The company had a turnover of $24.3 million in FY24.

TCS AI Plans

Here's a snapshot of what TCS aims to do in the AI space:

• A new business entity to build world-class AI infrastructure
• Setting up of a 1 GW AI data centre in India
• Acquisition of ListEngage with deep capabilities in Salesforce
• Sustained investments in nurturing AI-first culture and talent

TCS AI Jobs

The Tata Group company, which recently saw a round of layoffs that cut 2% of its global workforce, has reskilled more than half of its 600,000+ employees in artificial intelligence, machine learning, and Generative AI, as of FY24.

TCS is using a so-called AI Experience Zone—an internal sandbox of sorts—for employees to experiment with AI, open-source models, etc. Now, as part of its broader AI plans, it aims to nurture an AI-first culture and talent within the organisation.

TCS AI Deals

• The IT services firm recently won a €550 million (about $644 million) deal with Scandinavian insurer Tryg to use AI, cloud and digital toold to manage its IT operations over the next seven years.
• TCS has reported deal wins of total contract value $10 billion, which according to some reports is indicative of its AI pipeline.
• The push in BFSI, life sciences, and other verticals is often tied to AI and automation components.

Essentially, TCS is not just doing Gen AI experiments but trying to embed AI into mainstream client transformation deals.

On Thursday, TCS shares rose 1.09% to ₹3,060.20 apiece on the BSE even as the benchmark Nifty 50 ended the day 0.54% higher at 25,181.80 points. TCS’ quarterly results were declared after market hours.