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With Accenture reporting $1.1 billion in revenue from generative AI and TCS seeing a $900-million deal pipeline, Infosys and Wipro settled for seeing strong traction in generative AI deals in Q4.

Investors were scanning for Gen AI-related announcements in the earnings fineprint of IT companies, even as the entire sector struggled with the ongoing slowdown in discretionary spend by IT services clients, macroeconomic headwinds and the burden of expectations set by Accenture’s generative AI deal updates. But did the companies deliver?

Accenture

The company is in the middle of deploying $3 billion into building its AI capabilities. It also plans to upskill about 250,000 of its workforce in AI. Last month, Accenture said they are seeing robust interest for generative AI, with cumulative revenues of $1.1 billion during the first two quarters (Accenture follows September-August financial year).

TCS

On April 12, TCS shared that it has $900-million worth of generative AI and AI projects in the pipeline. At the TCS earnings call, CEO K Krithivasan had said, “Subsequent to our launch of AI.Cloud unit, we are seeing an increased traction in our marketplace. We have won more than 200 engagements in AI so far this year.”

“The number of engagements going into production is steadily increasing. Our AI and Gen AI pipeline has doubled in the quarter to $900 million,” he added.

Moreover, post earnings, in a letter to employees, Krithivasan highlighted that TCS has one of the largest AI-ready workforces. TCS has so far trained around 350,000 of its employees in AI skills.

Infosys
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While Infosys did not share exact deal numbers or the pipeline size, CEO and MD Salil Parekh said that the company’s Gen AI practice is “industry leading.”

“The type of work we are doing, for instance, the 3 million lines of codes we have generated through large language models in generative AI is absolutely industry leading,” Parekh had said on April 18. Parekh added that nearly eight out of 10 of Infosys employees are now skilled in AI.

Infosys had last updated that it had 50 active generative AI client projects in the pipeline, back in June 2023.

Wipro

The company is in the middle of an overhaul under new CEO Srinivas Pallia, who said that industry-specific offerings and business solutions, mainly on consulting businesses, which can be infused with artificial intelligence (AI) will be one of the key strategies in a five-pointer business turnaround plan for the company.

Wipro will continue to build AI-ready talent at scale. This workforce will be trained to deliver industry-specific business solutions, Pallia said. So far, Wipro has trained about 225,000 employees in generative AI skilled.
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In July 2023, Wipro had earmarked about $1 billion to invest into expanding its AI capabilities and business.

Gen AI changing hiring models, driving efficiency

One interesting narrative that emerged in Q4FY24 was companies, including Infosys and Wipro, talked about how generative AI and internal automation will be key levers in improving operating margins as well as chalking out hiring plan for FY25.

Wipro reported a second consecutive year of losing employees in FY24, after its headcount for the full year went down by 24,516. The hiring models too are fast changing, according to Wipro’s HR chief Saurabh Govil.


Govil said that headcount reduction was mainly driven by demand environment as well as operational efficiencies, which have been reflected in the company’s increased margins.

In the longer term, with AI taking centre-stage and as the company moves into more IP-based platforms AI, there could be a divergence coming, more and more in terms of headcount, Govil added.
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“But we still need to look at our entire portfolio, a large amount of work which we do with our clients, so it’s a combination of both (demand and tech changes) as we move forward, and that it will evolve over a period of time,” he said.


A similar commentary was found at Infosys’ analyst conference for Q4 earnings. While speaking of levers in place to achieve a 20-22 percent operating margin in FY25, CFO Jayesh Sanghrajka said, “On the GenAI and automation, we have done a lot of progress and we are doubling down on that. So I think all of those are baked in, in the current guidance of 20-22 percent. But our endeavor is, continues to improve operating margin in the mid-term.”
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