The increase implies that TCS added approximately $300 million in annualised AI revenue run rate during the quarter. While AI remains a relatively small share of TCS’s overall revenue base, it is emerging as one of the company’s fastest-growing businesses and an increasingly important driver of large transformation deals.
AI anchors large deal wins
The standout deal for TCS this quarter was an $800 million contract with SKF, the Swedish industrial group, structured around what TCS describes as building an “enterprise nervous system”: a self-learning operational backbone tying together SKF’s data, processes, and platforms.
CEO and Managing Director K Krithivasan also said that customer demand for AI, modernisation, and platform simplification was translating into “strong deal conversion” and “expanding ecosystem partnerships.”
Similar projects included an AI and data governance centre for a North American utility, an agentic AI-based HR operations programme for a Europe-based Fortune Global 50 company, and an AI-powered IT support platform for a large US healthcare payer.
Total contract value (TCV) for the quarter came to $9.5 billion, with AI as the central pitch in nearly every headline win. Aarthi Subramanian, Executive Director, President and Chief Operating Officer, described the quarter as validating TCS’s approach to “AI-led efficient ITOps, accelerated Software Engineering and Modernization” and “AI-first process redesign” across its client base.
Also read:TCS Q1 Results: Earnings meet expectations with deal wins at $9.5 billion
The switch to selling compute
TCS continued to expand its AI infrastructure business this quarter. Building on its earlier OpenAI and ABB partnerships, the company launched SovereignSecure Cloud in Europe, combining sovereign cloud architecture with AI capabilities for governments, public sector organisations and regulated industries that need data to remain within national borders.
The company also expanded its partnership with Google Cloud to help clients deploy and manage agentic and autonomous AI systems. In addition, it launched a new business unit, Global Value & Innovation Centres (GVIC), to help enterprises build AI-native global capability centres from the ground up.
Hedging across AI labs
Rather than aligning itself with a single AI provider, TCS has continued to diversify its AI ecosystem.
During the quarter, the Tata Group IT bellwether signed a strategic alliance with Anthropic, gaining access to Claude models and planning to deploy them across 50,000 employees.
TCS also became the first global systems integrator to partner with Mistral’s enterprise AI platform, Mistral Forge, while expanding its collaboration with Google Cloud.
Subramanian framed the two deals as part of a deliberate expansion, saying TCS “signed strategic partnerships with Anthropic and Mistral expanding our AI ecosystem.”
Turning AI work into reusable IP
TCS has also continued to build intellectual property around its AI offerings.
India’s largest AI services exporter has filed 1,996 AI-related patents to date, including 163 this quarter alone, and holds 602 granted patents in the category. That’s a meaningful slice of TCS’s broader patent estate of 9,803 filed and 5,670 granted.
The patented tools and frameworks can be reused across client engagements instead of rebuilt from scratch each time, which is what lets a services company scale AI work profitably rather than treating every project as a one-off.
Also read:TCS won’t hire in the same numbers as before: Here’s what chairman N Chandrasekaran said
The quarter’s numbers also line up with remarks Tata Sons Chairman N Chandrasekaran made at TCS’s annual general meeting (AGM) in June. He described AI not as a threat to the business but as its next foundation: “AI is not merely a technology. It is infrastructure — an infrastructure of intelligence.”
He added, “Far from being a mortal threat, AI is the most significant opportunity yet for enterprise IT.”
Q1FY27 is the first full quarter of results since those remarks, and much of what Chandrasekaran described shows up directly in the numbers: AI positioned as the backbone of TCS’s biggest deals.
Despite the growth in its AI business, TCS has had a difficult year on the stock market. The company has lost nearly ₹4 lakh crore in market capitalisation since the start of 2026, with the broader IT sector also under pressure amid concerns over global technology spending.
TCS shares are trading at their lowest level since June 2020, highlighting the gap between the company’s growing AI business and investor sentiment.
Also read:TCS has lost more market value than the Tata Group during the first six months of the year
