TCS flags AI-driven productivity gains reducing client spending

Artificial intelligence (AI) is beginning to change the commercial model of India’s $315-billion IT services industry, with Tata Consultancy Services (TCS) saying productivity gains from AI are helping lower clients’ technology spending even as companies bet on larger transformation programmes to offset the impact.

The comments from India’s largest IT services exporter come at a time when the sector is grappling with weak discretionary spending, delayed decision-making by clients and growing pressure to pass AI-driven efficiency gains back to customers.