TCS, Infosys shareholders seek clarity on GenAI use
BENGALURU, INDIA—Generative artificial intelligence (GenAI) emerged as a main topic of discussion at the recent annual general meetings (AGMs) of India’s leading IT services companies Infosys and Tata Consultancy Services (TCS), which are ranked #8 and #45 in the OA500 2024.
According to a Mint report, retail shareholders expressed significant interest in understanding how these companies are utilizing GenAI to future-proof their businesses.
Infosys’ commitment to GenAI
During Infosys’ AGM, held in Bengaluru, a substantial portion of the 21 retail shareholders present sought insights from Chairman Nandan Nilekani and CEO Salil Parekh regarding the impact of GenAI on the company.
Nilekani emphasized GenAI’s transformative potential, comparing it to other general-purpose technologies like electricity and the Internet.
“People have accepted that, like any other general-purpose technology be it electricity, nuclear energy, the internet or even a discovery like fire, GenAI has enormous potential for good when explored and advanced within the guardrails of responsibility,” Nilekani told shareholders.
He also highlighted that Infosys is actively working on 225 GenAI projects and has trained approximately 79% of its 250,000 employees on disruptive technologies.
TCS’ strategic approach to GenAI
Similarly, at TCS’ AGM, held in Mumbai, 20 out of 30 questions posed to Tata Sons Chairman Natarajan Chandrasekaran revolved around the company’s GenAI strategy.
Chandrasekaran assured shareholders that TCS is investing heavily in GenAI to enhance productivity and drive innovation. He noted that TCS has trained over 150,000 employees in foundational GenAI skills and launched an AI Experience Zone to foster hands-on proficiency.
“GenAI will not only improve productivity, but also create impact we hitherto have not seen or imagined,” said Chandrasekaran in his address to shareholders.
Shareholder concerns on GenAI impact
Retail shareholders’ concerns are understandable, given their reliance on dividends and share buybacks from these IT giants.
Last year, TCS returned ₹47,445 crore ($5.68 billion) to shareholders, while Infosys distributed about ₹19,000 crore ($2.27 billion).
Shareholders questioned how GenAI might affect the companies’ workforce and future cash flows, with some expressing fears that automation could cannibalize traditional IT services roles.
Infosys shareholder Vipul, for instance, urged the company to disclose revenue contributions from the GenAI segment, similar to practices adopted by competitors like Accenture.
In response, Nilekani and Parekh highlighted Infosys’ strategic investments in GenAI and its potential to drive long-term growth.
Broader implications of GenAI adoption
The discussions at the AGMs reflect broader industry trends, as GenAI continues to be a major talking point in the technology sector. Since the launch of ChatGPT in November 2022, GenAI has been seen as a catalyst for business disruptions across various industries.
However, the adoption of GenAI also raises concerns about job displacement and the need for responsible AI practices.
Both TCS and Infosys have committed to advancing GenAI within ethical frameworks, ensuring that the technology is used responsibly to maximize its benefits while mitigating potential risks.
As these companies continue to invest in GenAI, they aim to balance innovation with responsibility, ensuring sustainable growth and value creation for their shareholders.
