TCS To Set Up 1 GW AI Data Centre Network In India

In its Q2 FY26 disclosures, Tata Consultancy Services’ (TCS) announced that its board has approved the incorporation of a wholly owned subsidiary in India to establish multiple AI data centres with a combined capacity of 1 GW.

While the company is yet to officially announce the name of the new entity, it informed that the new business will focus on building advanced AI infrastructure and offering tech-enabled services to support its AI development. 

“We are on a journey to become the world’s largest AI-led technology services company. Our journey is anchored in bold transformation across talent, infrastructure, ecosystem partnerships and customer value. The investments, including the building of a world-class AI infrastructure business, demonstrate our commitment to this transformation,” TCS’s MD and CEO K Krithivasan said. 

Besides, TCS also announced the acquisition of digital marketing-focussed company ListEngage. The acquisition will enhance its enterprise solutions and AI-powered automation capabilities, especially in Agentic AI.

On the financial front, TCS reported a 2% increase in its net profit to INR 12,131 Cr in Q2 FY26 from INR 11,955 Cr in the same quarter previous year. Its top line grew 3% YoY to INR 65,799 Cr. In parallel with it doubling down on AI, the IT giant has also undertaken a major workforce reduction in the quarter. Its headcount dropped to 593,314 employees from 613,069 in Q1 FY26, a net decline of 19,755 in one quarter.

In the quarter under review, TCS undertook the following AI-related initiatives: 

• TCS partnered with French research institute CEA  to accelerate development of its Physical AI solutions. The company said that Physical AI is focused on bringing together robotics, AI, and intelligent systems
• It partnered with Qualcomm to set up a ‘TCS Innovation Lab’ to co-create sustainable Edge AI capabilities utilising Qualcomm platforms for industries moving towards a software-driven approach. From the research in the lab, TCS plans to launch customised low-cost solutions that can be deployed across intelligent devices at large enterprises.
• It signed a MoU with the Centre for Development of Advanced Computing (C-DAC) to develop a sovereign cloud ecosystem. The duo plans to build AI-enabled cloud platforms that align with India’s data localisation mandates.

Earlier last year, the company also unveiled a new platform to help businesses aggregate multiple GenAI services and LLM models into a single interface and enable businesses to adopt next gen technologies at scale, lower costs and within regulatory frameworks.

While TCS has been aggressively pushing on developing its AI abilities, it must be noted that the company’s focus has largely been around integrating GenAI within its services rather than building a foundational AI model. In this, it is not much different than other Indian IT giants like Infosys and Wipro. 

These companies’ GenAI strategy revolves around fine-tuning small language models, developing GenAI agents, and optimising workflows rather than creating truly novel AI architectures or training frontier models from scratch.