What's next: The AI and A-I challenges for Tata group after Chandra's exit

N Chandrasekaran's exit comes as Tata Group faces twin challenges from AI-led disruption at TCS and mounting losses and a delayed turnaround at Air India

N Chandrasekaran’s decision to resign as Tata Sons chairman comes as the Tata group confronts two very different challenges: Artificial intelligence (AI) and Air India. 

At TCS, the group’s biggest source of equity capital, Chandrasekaran earlier this year acknowledged that AI-led automation will slow hiring, with the company potentially having as many AI agents as employees within three years. The challenge is strategic as much as operational, as AI-native competitors threaten traditional IT service revenues. TCS’ adjusted net profit rose only 8.3 per cent in FY26, while its market capitalisation fell 34.6 per cent, its weakest annual performance in at least 15 years. Its dividend payout also declined, potentially squeezing Tata Sons’ ability to fund new and loss-making ventures. 

The Air India challenge is even more capital-intensive. Since the Tata group took control in January 2022, the group has accumulated losses of about ₹47,821 crore. The ambitious “Vihaan.AI” transformation envisaged profit­ability after 2027; Chandrasekaran now says the turnaround could take 5-10 years, pushing profitability beyond 2032. Aircraft-supply disruptions, legacy systems, fleet renewal, organisational culture and talent shortages have slowed the overhaul, while operational lapses have added pressure.