TCS tells staff to deploy AI even if it cannibalises revenue: CEO Krithivasan

India’s largest IT services firm Tata Consultancy Services (TCS) is encouraging employees to deploy artificial intelligence tools for clients even if it eats into its own revenues, its chief executive said on Wednesday.

Speaking at the annual NTLF event in Mumbai, TCS Managing Director and CEO K Krithivasan said the company was “not afraid” of AI and was asking its more than 600,000 employees to become fluent in the technology.

“We encourage our associates to go out to customers and use AI, even if it means cannibalising our revenues,” Krithivasan said at an industry event.

He said that while younger staff were proving more proficient than senior employees at building AI-based solutions.

According to Krithivasan, those who climb up the hierarchy and become senior employees tend to read a lot but do not build anything.

He stressed that effective use of AI required hands-on development rather than simply prompting generative platforms such as OpenAI’s ChatGPT.

Krithivasan described AI as a “civilisational shift” that was democratising knowledge and solving problems that had remained unresolved for decades.

AI is becoming a board-level agenda now, wherein the chief information officers are being directed to scout for solutions, he said.

The company is also exploring governance frameworks where AI systems could help monitor and regulate other AI tools through multiple agents, he added.

The comments come amid mounting pressure on Indian IT stocks as investors weigh how AI could reshape the outsourcing industry.

Benchmark indices BSE Sensex and Nifty 50 fell more than 1% on Tuesday, dragged lower by heavy losses in technology shares.

Tech Mahindra led the declines, sliding 6.6%, followed by HCL Technologies, Infosys and TCS, among others.

Data showed the Nifty IT Index has dropped nearly 21% over the past month.

In a recent note, Jefferies said AI could structurally alter the IT services business by shifting revenue towards consulting and implementation while shrinking managed services. This would not only increase cyclicality but also require a change in talent/operating model.

It added that despite a roughly 16% year-to-date fall in IT stocks, the sector still offered more downside than upside.

Krithivasan said AI would boost productivity but stressed that TCS was equally focused on ensuring customers captured tangible benefits from the technology, even if that meant short-term sacrifices for the company.