Infosys loses $1.5 billion AI contract from global customer

Infosys had partnered with the said global company to provide digital experiences using Infosys’ platform and AI solutions.

Infosys on December 23 announced that the undisclosed global company, which had previously signed a $1.5 billion deal focused on artificial intelligence solutions, has now decided to terminate the Memorandum of Understanding (MoU) with the IT services giant.

This was intended to be a 15-year deal, inked in September 2023, signaling increasing uncertainty in the demand and technology budgets of IT services customers.

Interestingly, this comes less than two weeks after the company's former CFO, Nilanjan Roy, suddenly resigned.

“This is in continuation to the disclosure made by Infosys vide letter dated September 14, 2023, titled “Company update” with respect to a Memorandum of Understanding with a global company which was subject to parties entering into a Master Agreement,” Infosys said in an exchange filing.

“The global company has now elected to terminate the Memorandum of Understanding and the parties will not be pursuing the Master Agreement,” the company added. No further reason was given for the termination and neither was the name of the global company disclosed.

Infosys had partnered with the said global company to provide digital experiences using Infosys’ platform and AI solutions.

As of the second quarter ended September 30, Infosys had reported its highest ever large deals TCV of $7.7 billion, where this deal was counted.

Other mega deals in its kitty include a $2-billion contract with an existing customer to provide AI and automation-led development and maintenance services over five years and a $1.5-billion deal with Liberty Global over five years. Infosys also reported a 5-year deal from LKQ Europe this week, apart from several others.