Winning deals: IT services companies upping Gen AI engagements
MUMBAI: IT services companies are now seeing an increasing number of Generative AI (Gen AI) engagements, and it is expected to rise in future too. Cognizant, which reported a 2.7% increase in its revenue at USD 5 billion for the September quarter, now has more than 1,000 Gen AI early engagements compared to about 750 at the end of the previous quarter.
"We are seeing significant traction in four categories of use cases starting with tech for tech or applying AI to software development cycles, which had the highest velocity, followed by customer and employee experience, content aggregation and early use cases in content generation," Ravi Kumar S, Chief Executive Officer, said at the company's earnings call.
He added that in the past, it was labour-led cycles but the company has now optimised it across the industry and that the new cycles are technology-led. "AI-led and automation-led productivity sharing the benefit with our clients is a mainstream model which we are adapting to win these large deals where we have had sustained momentum," he said.
Infosys is now deepening its work in Gen AI. The company is also building a small language model leveraging industry and Infosys datasets. "Our Generative AI approach is helping clients drive growth and productivity impact across the organisation. We are partnering with clients to build a strong data foundation which is critical for any of these Generative AI programs," the company's CEO and MD Salil Parekh said at the Q2 earnings conference.
"Any of the large deals that we are looking at, there is a Generative AI component to it. Now it is driving the large deal, not in itself, but it is very much a part of that large deal," Parekh informed.
Apart from Accenture, many top IT companies have so far not disclosed the AI/Gen AI TCV (total contract value). TCS said it has been improving well and almost doubling every quarter. "The pipeline remains very strong. As of this quarter, the engagements in AI/GenAI, including the POCs, (proof of concepts) POVs, (proof of value) and production, we are doing more than 600 engagements, which increased from almost 270 last quarter. It's a very significant increase in the number of engagements," said TCS CEO and MD K Krithivasan during the company’s Q2 earnings conference call.
Also, the company's engagements are going into production. "Last quarter, we had 8 engagements that went into production. And this quarter, we have almost 86 engagements going into production. We are finding all-round improvement and becoming mainstream," he added. Wipro has trained and certified over 44,000 employees in advanced AI. “We want to be an AI-powered company and we are investing big into Gen AI,” the company’s CEO and MD Srini Pallia said.
In FY24, Accenture saw USD 3 billion in new Gen AI bookings, including USD 1 billion in 4Q, and clocked nearly USD 900 m in revenue.