EPAM says Gen AI projects with dozen clients generating millions in revenue each

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Midcap IT firm EPAM said each of its generative artificial intelligence (Gen AI) projects with dozens of clients are making millions in revenue. While some of these engagements involve multiple projects, the Pennsylvania-based company sees growing interest in applying Gen AI to areas like application maintenance and BPO—fields that have traditionally not been significant revenue streams for the company.

“We probably have a dozen relationships with that (Gen AI projects)… beginning to mature into millions of dollars of pure Gen AI revenue per client,” EPAM Chief Financial Officer Jason Peterson told Moneycontrol.

For the context, Accenture ended the financial year 2023-24 with Gen AI order inflows of $3 billion and $900 million in revenue, a significant jump from $300 million in order inflows and $100 million in Gen AI revenues seen in FY23. On the other hand, rival Tata Consultancy Services (TCS) has disclosed $1.5 billion worth of AI and Gen AI projects.

Accenture and TCS are the only two big IT companies that have so far declared revenue from this nascent technology.

Peterson, who is also the treasurer of the company, said EPAM initially helped clients understand how Gen AI could transform their businesses, moving from small proof-of-concept (PoC) projects to full-scale production. The dozen relationships being spoken about here are through applications in engineering productivity, white-collar staff efficiency, and even supply chain and inventory management.

“We started with relatively small engagements, helping clients understand Gen AI’s potential,” said the former Cognizant Technologies vice-president who served for over nine years.

EPAM’s India operations, led by Managing Director Srinivas Reddy, also sees strong demand for Gen AI across multiple sectors. The company is helping clients in production environments across India, including life sciences, hospitality, and high-tech companies.

Reddy explained that while their focus is primarily on software development lifecycle (SDLC), Gen AI is making its way across verticals. “We’ve got over a dozen clients where we’re helping them in production today, and it spans multiple sectors from life sciences to high-tech,” he said, adding that the company’s Indian clients are mostly Global Capability Centers (GCCs).

The company has also developed its Large Language Model (LLM), called the EPAM DIAL. Recently, EPAM Systems introduced StatGPT 2.0 for accessibility of economic and financial data, along with the International Monetary Fund (IMF) using the EPAM DIAL LLM.

Traditionally, the focus has been on new build areas, Peterson highlighted an increasing interest in applying Gen AI to business processes such as application maintenance and business process outsourcing (BPO) areas that have not historically contributed to EPAM's revenue streams. He pointed to the company’s recent acquisition of First Derivative, a provider of high-end knowledge process outsourcing (KPO) services for banks and capital markets.

EPAM acquired the Northern Ireland-headquartered firm with more than 1,800 employees worldwide for an undisclosed amount this month.

“One of the big sources of revenue growth in the coming years will be in preparing clients for Gen AI,” Peterson, an alumnus of Columbia Business School, said. “Less than 10 percent of companies have their data organised in a way that can truly leverage Gen AI, and there’s a lot of work to do to get that data ready.”

One of the main challenges that companies face while adopting and scaling Gen AI is unstructured data. EPAM also highlighted the importance of data preparation.

Peterson said that data-related services, a core competency of EPAM, will continue to be a significant revenue driver as clients will award these deals to lap on to the opportunity productivity benefits from Gen AI.

“As we continue to introduce Gen AI into every engagement, we believe that data preparation will play a critical role in driving future revenue,” he added. “It’s an immense opportunity for us to help clients unlock the full potential of Gen AI.”