TCS forms AI-focused unit

India's largest IT firm Tata Consultancy Services formed a new unit for artificial intelligence-based operations and named insider Amit Kapur as its chief, a company memo seen by Reuters showed.

The new AI and services transformation unit will house all of the company's existing capabilities in the technology with an aim to deepen its focus on AI domain solutions and accelerate innovation, the memo said.

TCS' formation of the new unit comes a month after the sector bellwether announced plans to cut 12,000 jobs, flaring up signals that India's US$283 billion ($436 billion) outsourcing sector could see more layoffs as the use of AI deepens.

Indian IT companies are racing to adopt and offer more AI products to attract client spending, which has been suppressed for many quarters due to global macro-economic uncertainties.

"Over the last few years, TCS has made major forays on the AI front by scaling our capabilities, reskilling our workforce and deepening our partnerships," the company said in the memo.

Kapur, who has been with the firm for two decades, takes charge of the unit from September. He last headed TCS' UK and Ireland business.

The company did not immediately respond to Reuters' request for comment seeking confirmation on Kapur's appointment and formation of the unit.

TCS is the first among Indian IT companies to dedicate a business catering solely to AI and allied technologies, and follows a similar move by US rival Accenture in June.

"IT firms have started to think that AI-led transformation is their only major lever now to accelerate growth amid tepid macros," said Pareekh Jain, founder of IT research firm EIIR Trend.

"The change is also a reflection of extracting more AI-focussed projects from clients."