TCS sees more Gen AI projects move into production in Q3

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Tata Consultancy Services (TCS) started seeing more generative artificial intelligence (Gen AI) proof of concepts (PoCs) move into production in the December quarter, IT services major chief executive officer and managing director K Krithivasan has said.

Krithivasan, who did not share updated numbers around generative AI deal pipeline, said AI adoption continued to gain momentum. The quantum of PoCs going into production is “slowly improving” from just 10-12 percent in Q2, he said.

“It's not to say 50-60 percent programmes are going into production but those numbers are improving. We are seeing more programmes and more percentage of programmes going into production. So it's a sign of both maturity of the technology and the confidence our customers in these technologies delivering the value,” he said at the company’s Q3 earnings conference on January 9.

“We are seeing continued momentum in AI adoption. Clients are increasingly investing in agentic AI adoption, building robust data foundation and taking a value chain based approach for AI and Gen AI transformation…We also saw an increase in successful production deployment of Gen AI and AI engagements leading to greater business certainty and confidence for our clients. Our investments on research and innovation continue.”

In the previous quarter, TCS said it was managing over 600 AI and Generative AI  projects either in production or development.

The IT behemoth is also setting up interdisciplinary AI offices and Centre of Excellence (CoEs) to strategise, prioritise and implement the technology at scale.

In December, rival Accenture reported new bookings for Gen AI at $1.2 billion for the first quarter of FY25. Accenture follows an August-September fiscal year. In Q4, the company recorded Gen AI new bookings of $1 billion and $3 billion for the full FY24.

TCS reported a 12 percent year-on-year growth in consolidated net profit at Rs 12,380 crore in the December quarter, 2024, beating estimates marginally.

Its consolidated revenue was up 6 percent at Rs 63,973 crore, falling a tad short of expectations

At 12.19 pm, TCS was trading at Rs 4,280.45 on the National Stock Exchange, up 5.98 percent from the previous day.