N Chandrasekaran takes control of the TCS AI ride

Tata Sons Chairman Chandrasekaran Steps Up Role at TCS to Lead AI Push

Tata Sons chairman N Chandrasekaran is taking a more direct role at Tata Consultancy Services (TCS) as the group works to protect and strengthen its biggest revenue generator amid rapid disruption from artificial intelligence (AI), people familiar with the matter said.

The move comes as AI technologies begin to challenge traditional IT services business models, prompting the Tata Group to prioritise TCS’s long-term growth and competitiveness.

Chandrasekaran is focusing on positioning TCS as the default AI partner for other Tata Group companies and is also exploring acquisitions of AI-focused startups to speed up the company’s transition, sources said.

“The legacy business model of TCS cannot stay the way it was,” a senior executive said. “Chandrasekaran has told his team to do what it takes to grow and defend its turf.”

Speaking to over 700 employees at a company event in Dubai, Chandrasekaran stressed the need for continuous upskilling to prepare for AI-led changes.

TCS plays a crucial role for the Tata Group, contributing a major share of dividends that fund its diverse businesses. As of 2024, Tata Sons owned 71.74% of TCS, and nearly 80% of its dividend income came from the IT services giant.

Industry experts say the company cannot risk losing relevance among global clients at a time when AI research labs and tech firms are moving up the value chain with advanced tools. Products such as Anthropic’s Claude Cowork are seen as potential competitors to traditional IT services and software providers.

These concerns recently triggered a sharp selloff in technology stocks, with the Nifty IT index falling up to 8% and wiping out nearly ₹2 lakh crore in market value. TCS shares hit a five-year low before recovering slightly.

TCS CEO K Krithivasan and COO Aarti Subramanian, both close associates of Chandrasekaran, are expected to lead the execution of the new strategy.

Experts say simply rebranding IT services as AI services will not be enough. Companies must invest in innovation, build new capabilities and adopt new operating models to stay competitive.

TCS has already begun reshaping its strategy through workforce rationalisation, investments in data centres, a stronger consulting focus and acquisitions. Earlier this year, it acquired Salesforce consulting firm Coastal Cloud for $700 million, its largest deal so far.

Tata Sons and TCS declined to comment on the developments.