TCS in 'advanced' talks for more AI data centers in India as demand rises

Tata Consultancy Services Ltd., which just cut an agreement with OpenAI to build data centers for artificial intelligence in India, is nearing additional deals with other tech giants, signaling a commitment to reshaping its business model to capitalize on the emerging technology. 

“We are having discussions with multiple other hyperscalers,” said Chief Executive Officer K Krithivasan during an interview at the company’s offices in London. “We are in advanced discussion with multiple players.”His company is racing to build out the country’s AI infrastructure because of what he sees as an enormous opportunity to deploy the technology in the world’s most populous nation. India is likely to need about 10 gigawatts of AI data center capacity by 2030, he said, while only about 5 or 6 gigawatts have been announced so far. TCS wants to help close that gap. 

 

“We are very, very bullish,” said the 61-year-old. “There is going to be lot of latent demand or unmet demand by 2030 so there is going to be a lot of investment required.” 

TCS, which pioneered the strategy of providing tech expertise to Western banks, airlines and other corporations, has been under pressure in recent years from rising competition, US visa policies and the prospect of AI disruption. Once a stock market darling in India, the company’s shares have declined about 20% this year and roughly 23% since Krithivasan took over in June of 2023. 

“TCS needs to set a narrative on what it is that they are doing in AI,” said Arun Kejriwal, founder of Kejriwal Research and Investment Services Pvt. “People still don’t know what to expect of an IT services company as far as AI is concerned.”  

Corporate clients are shifting their IT spending away from the services traditionally offered by TCS and its peers, said Anurag Rana, analyst for Bloomberg Intelligence.  

“Clients are cutting budgets because they’re investing in AI,” Rana said. “If the clients are not spending, he, anybody else, cannot do anything.” 

Krithivasan is not planning a radical break from the past. Rather, he sees AI as yet another opportunity for TCS to advise corporate clients on how to adopt new technology, much like it has done in the past for cloud computing or mobile services.  

He doesn’t believe large language models like those from Anthropic PBC or Alphabet Inc. will simply wipe away the need for corporations to operate large tech systems and hire teams of consultants to keep them humming. Banks, retailers and telecom players have complex systems dating back decades that need to support employees, store data, track inventories and deliver for customers. 

“Will the whole value chain be replaced by an LLM? It’s a far-fetched thing. That’s not going to happen,” he said. “It’s not that you can just go drop Anthropic in there.”  

TCS’s data center investments are a shift in its business model. The Mumbai-based company announced at India’s AI Impact Summit in February that it will partner with OpenAI to build facilities of at least 100 megawatts and as much as 1 gigawatt.  Typically, a 1 gigawatt data center would cost $35 billion to $50 billion, but TCS won’t bear that cost. 

Krithivasan said TCS will help pay for the structure itself, including racks, connectivity, power and cooling. That should cost roughly $7 billion to $8 billion. TCS will put in $1 billion, while partner TPG Inc. will contribute the same amount; the remainder will be financed with debt. 

“We are looking at a fairly attractive IRR,” he said. 

The real payoff, he thinks, is that TCS can distinguish itself with AI infrastructure, valuable and perhaps scarce access to leading models and Nvidia Corp. chips.  

“To our customers, we will be able to offer end-to-end services,” he said. “We can offer infrastructure, we can offer model training, we can offer agents, we can offer application intelligence. The entire stack, we can offer to our customers.” 

TCS’s innovation hub in London, a sprawling space with stunning views of the city, offers a hint of what’s to come. Current and prospective clients stop by to brainstorm new ideas for how to take advantage of new technologies — especially AI. The visitors usually begin with  Lovable, a popular “vibe coding” tool for beginners, to prototype apps quickly to test out new ideas on-site, said the company’s head of innovation for UK and Ireland, Ved Sen.  

TCS wants to encourage clients to think through the dizzying possibilities for AI in their businesses. That could be productivity improvements — like finishing software coding projects in a week instead of months. Or it could mean reengineering wide swathes of their enterprises because of the new capabilities.  

One health-related idea, created for TCS’s sponsorship of the London Marathon, shimmers  in a case in one corner of the hub. Using data pulled from real athletes, TCS created a digital twin of a heart that can simulate the organ’s response to different training regimes, physiological evidence that can help a runner’s preparation decisions. 

Responding nimbly to client demands for AI will have knock-on effects on hiring. TCS has about 600,000 workers and is a large employer of college graduates. The company hired around 85,000 new staff in 2025 and intends to maintain its current pace. Some 20,000 offers have been doled out so far for 2026. 

“We may need people with different kinds of skillsets,” said Krithivasan. “We maybe end up hiring people with more creative skills, people with more business background.” 

Krithivasan pushed back on the idea that rising protectionism under US President Donald Trump would hurt his business. While the US is hiking H-1B visa application fees to $100,000 to make it more expensive to bring foreign workers into the country, TCS has scaled way back on such hiring.  Fewer than 1,000 people will be hired through such visas this year, he said. Of the approximately 40,000 TCS staff in the US, fewer than 15,000 are dependent on the talent visa, Krithivasan said. 

“We hire much more in the US than we send people from India,” Krithivasan said. “Our dependence on the H-1B is very limited.” 

Half of TCS’ revenue in 2025 came from the US, while the UK is its second-largest market.  

UK lawmakers questioned the company last September after three TCS customers were hit by crippling cyberattacks. 

A ransomware attack last April on retailer Marks & Spencer disabled online orders for months and disrupted payment systems.  The retailer said attackers gained entry to its systems by tricking staff at an unnamed third-party contractor into handing over information. Fellow retailer Co-op was impacted by a similar cyberattack the same month. 

Automaker Jaguar Land Rover, a Tata Group sister company, shuttered manufacturing sites around the world after a ransomware attack during the summer, costing the UK economy an estimated £1.9 billion, according to an analysis by non-profit Cyber Monitoring Centre. 

In all three cases, TCS conducted internal probes and concluded “there was no compromise” within its networks, said Krithivasan in a statement. 

Almost three years into his tenure as CEO, Krithivasan says the lessons he’s learned in the role are pretty much the same ones he uncovered working his way through the company over a 30-year career.  

“Staying close to your customers and staying close to your employees are the two things that cannot be overemphasized,” he says, as the sun begins to drop toward the horizon behind him and the River Thames stretches into the distance.