TCS CEO Urges AI-First Push Despite Risk to Revenue

Tata Consultancy Services CEO K. Krithivasan on Feb. 25 urged employees to deliver AI-first solutions, even if it cannibalises revenue, telling a Mumbai technology summit the shift is essential to remain competitive as generative AI reshapes IT services.

Speaking at the Nasscom Technology and Leadership Summit 2026 in Mumbai, K. Krithivasan said the company is not merely encouraging but insisting that employees adopt artificial intelligence in client solutions.

“I am encouraging you to ensure that the solution you provide to your customer is AI-first, even if it means that we are cannibalising the revenue,” Krithivasan said during a discussion moderated by Sindhu Gangadharan, managing director of SAP Labs India.

AI-First Strategy Takes Center Stage At Nasscom Summit

K. Krithivasan’s remarks come as concerns mount that end-to-end generative AI software could reduce demand for traditional IT services, pressuring margins and valuations across the sector.

Indian IT stocks have faced volatility amid investor worries that automation may shrink large, long-term service contracts that historically relied on sizable engineering teams.

In the conventional outsourcing model, companies such as TCS deploy teams of engineers over extended periods, billing clients for time and expertise. With AI tools accelerating coding, testing, and maintenance tasks, projects can now be delivered faster and with fewer personnel.

K. Krithivasan said the shift should not be viewed as a threat but as an evolution. “Actually, we are helping them to stay in the current industry world,” he said, referring to clients adapting to rapid technological change.

CEO Says Cannibalisation Needed To Stay Competitive

The CEO said TCS is directing associates to proactively recommend AI solutions to customers, even when it reduces billable work under older models.

“We are actually telling our associates that if you find that you can do something faster, better, safer with AI, you should probably go and tell your customer if you can do it, if you are willing to,” he said.

He added that the company is not afraid that AI will erode its business base. “Because we are not afraid this technology will take away our livelihood, we believe it’s going to open up more,” Krithivasan said.

The approach signals a strategic pivot for India’s largest IT services exporter as global enterprises integrate AI into core operations. Industry analysts say companies that fail to reposition risk losing relevance as clients demand outcome-based, technology-driven contracts.

Gangadharan asked what steps TCS is taking to incentivize employees to learn AI. K. Krithivasan responded that the push goes beyond incentives and reflects a broader cultural shift within the organization.

Employees can benefit by embracing the change rather than resisting it, he said, adding that productivity gains could unlock new opportunities.

TCS Shares Rebound Nearly 3 Percent After Prior Slide

TCS shares traded at 2,643.60 rupees at 12:20 p.m. on the National Stock Exchange, up nearly 3 percent from the previous close.

The stock had fallen almost 4 percent in the previous session, mirroring a broader sell-off in IT shares amid heightened AI-related concerns.

Market participants have debated whether generative AI will compress revenue for service providers or create new demand streams. Krithivasan’s comments suggest TCS is positioning itself to lead the transition rather than defend legacy revenue.

The company has invested in AI capabilities, training programs, and partnerships as clients seek automation, analytics, and intelligent software integration.

By openly acknowledging the risk of cannibalisation, TCS is signaling that long-term competitiveness may outweigh short-term revenue protection in a rapidly evolving technology landscape.

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