TCS to Have As Many AI Agents as Human Employees: N. Chandrasekaran

TCS’s AI transformation is well underway. In last quarter of fiscal 2026, TCS had annualised AI revenues of US$2.4 billion, which is growing at a CQGR of 22.4 per cent. “I predict that over the next three years, TCS will have as many AI agents as human employees. In enterprise AI, the scarcest resource will not be the model. It will be context and trust,” said N. Chandrasekaran, Chairman, Tata Sons.

In late 2024, Agentic AI systems crossed a critical threshold: they began to look genuinely ready for enterprise workflows: writing code, testing software, and running technology operations. At that moment, a profound question remained: if AI can perform the very tasks that the IT services industry was built around, what becomes of the industry itself?

“India’s technology industry built its global position by doing something many thought it couldn’t: taking powerful new technologies and making them work, reliably and accountably, inside the world’s most demanding institutions. Some say AI poses a fundamental threat to that model. I see it differently: far from being a mortal threat, AI is the most significant opportunity yet for enterprise IT,” the chairman said.

Globally, shares in all technology services and platform companies plummeted and India’s Nifty IT index fell more than a third. The year began with positive developments including the signing of the landmark India-EU trade agreement and the interim India-US trade deal. However, by early March, the start of the West Asia crisis brought rising concerns, falling output coupled with rising inflation.

 “Yet, margins have held. Revenues are up. The deal pipeline is stronger than ever. So, what is going on? I believe the disparity stems from a misconception surrounding the relationship between AI and IT services,” he added.

In fiscal 2026, TCS delivered consolidated revenue of INR 2,67,021 crore, a growth of 4.6 per cent over the prior year. Operating income was INR 66,838 crore with an operating margin of 25 per cent. Globally, three-quarters of enterprises expect technology spend to increase over the next two years, largely thanks to AI. The global enterprise IT industry, currently worth around $1.6 trillion, is forecast to hit $3 trillion within the next decade, effectively doubling. AI is raising the ambition of what technology can deliver across every sector.

“The market is widening as organisations once unserved by IT services require our expertise for the first time. AI tools reduce the need for human input in the building and maintenance of software. However, AI does more than reduce effort. It is not merely a technology. It is infrastructure – an infrastructure of intelligence. As the cost of intelligence falls, many more processes, decisions and interactions – in many more industries – will become candidates for AI-driven transformation,” he explained.

The Opportunities Ahead

AI demands a redesign of how end to end work gets done, from supply chains to customer journeys. This requires deep domain and customer knowledge. Managing and overseeing AI within organisations is the way forward.

Many businesses are still working with outdated systems, old infrastructure, fragmented data, weak cyber security. Overhauling these functions is the starting point for enterprise AI and will create substantial efficiency savings, allowing businesses to reinvest in better systems. The result is more spend on technology, not less. The goal is to update the primary technological functions that large businesses rely on.

“If maintaining applications were the defining annuity of the last era, governing intelligence will be the defining annuity of the next.”

As use of AI by governments and regulated institutions increases, so will the need to own and control AI technology, leading to more demand for sovereign cloud and data infrastructure. “They will need help connecting AI to existing IT systems and ensuring optimal compliance and oversight systems. This is long-term and complex work which requires expertise and institutional credibility. TCS is building this. TCS has launched sovereign AI infrastructure for India and Europe, providing AI capability that meets strict data sovereignty, security and compliance requirements,” he added.

Today, AI primarily exists in the world of software and computers, but soon it will make inroads into the physical world: stores, factories, warehouses, energy networks, vehicles and supply chains. “This will require experts who understand how to link IT, AI and physical equipment and infrastructure. But established firms still have the edge on what matters most: context and trust. This derives from deep regulatory knowledge, strong client relationships and decades delivering projects across borders. All will be of profound importance in the era of enterprise AI,” the chairman emphasized.