Gen AI Projects: TCS is involved in over 100 GenAI projects under Tata Group: N Chandrasekaran

Tata Consultancy Services is involved in over 100 generative artificial intelligence (GenAI) projects across Tata Group companies, TCS CEO N Chandrasekaran said on Friday, signaling a big focus on GenAI even as he outlined potential risks and the need for regulation.

These projects are showing measurable impact in terms of improved customer service, productivity and efficiency, he told shareholders of India’s largest software services company at its annual general meeting.

Chandrasekaran said that in e-commerce, GenAI is used to generate product catalogs, provide conversational shopping and provide personalized offers.

In manufacturing, GenAI enables shop floor workers to troubleshoot complex equipment by asking questions in their native languages, thereby increasing infrastructure availability and improving productivity, he said.

Chandrasekaran said companies are also using GenAI to analyze large documents, such as tender documents, to significantly shorten the sales cycle.

Artificial intelligence (AI) and GenAI will result in job losses in some areas but will create employment opportunities in other areas, he said.

Stating that this will impact every industry, the TCS CEO emphasized that the impact of the consumer industry will be most visible as consumers will feel the power of AI through personalization and better delivery along with the experience. Recently, TCS CEO K Krithivasan wrote to his employees that the company has built one of the largest and most AI-ready workforces in the world.

Chandrasekaran said there is no decline in IT spending. But the expenses are getting higher, he added.

Technology spending by all corporations will only increase due to megatrends such as digital technologies, artificial intelligence, modern supply chains, secured networks and drug discovery… all of which will require significant technology spending, he said.

The world is going through a geopolitical crisis or inflation, which will have a short-term impact on the IT budget, said the Tata Group chairman.

Addressing many questions regarding sexual harassment, he said TCS is a large organization operating in a global environment and promoting a culture that allows employees to express themselves. During this process, if people experience harassment, they should raise their voices and when they raise (these issues), the numbers will increase. “In a company of this size, you would expect this amount of harassment. The most important thing is how to deal with these cases with zero tolerance,” he said.

Moreover, Chandrasekaran said, “I don’t think we can switch to remote work to solve this problem. The company treats these calls as personal work based on many factors. We are not trying to create (just) jobs. We’re trying to create careers. This company is about building institutions.”

In response to questions about the 2014 Epic Systems lawsuit, for which TCS had created a provision, the company’s CEO said: “The case has been closed, but interest is still pending. Therefore, the amount of $11.5 million constitutes a reserve in the subsidiary, which will be decided by the court in the future.”

Referring to BSNL’s data center project, he said around 10,000 locations have been launched and more will be rolled out. “Our intention is to complete this project this fiscal year.”

Chandrasekaran said TCS has 6,01,546 employees globally and another 30,312 on contract basis.

Talking about the negative impact of artificial intelligence, he said that any technology will be misused by those who want it and this should be taken care of. “That’s why regulations are needed. This industry needs to be regulated. There is no doubt about it. Governments around the world are aware of this, and as we move into the future, regulations will become more frequent.”

Chandrasekaran said that in terms of likely job losses due to AI, it will have some impact as AI and GenAI automate work and improve productivity, but in other areas it will require much greater capabilities. “More jobs will be created in areas such as data management etc. It is a mixed bag that we need to deal with, take a proactive approach to so that we can reskill people and prepare them for the change,” he said.

Last year, TCS spent Rs 2,650 crore on capital expenditure. “This is less than normal as we have put some projects on hold during Covid,” said Chandrasekaran. “But these capital projects are just getting started. So we expect capital expenditure to increase in the coming years.”

Dividends

Reacting to comments that TCS should pay additional dividend for the 20th time, the CEO said it was “manifestly unjustified”. He stressed that TCS has been paying dividend every quarter since its listing and also paying annual and special dividend every two years.

In response to shareholder disappointment with the decline in share prices and returns, Chandrasekaran pointed out that the share price itself has increased approximately 37 times since the IPO. “So for every rupee you invested, you would get 37 times more, plus the dividends and buybacks were quite significant. Over the last five years it has been 100% and before that it was much higher,” he said.