America’s AI gold rush is staring at a haunting challenge as most U.S. companies struggle to see real-world benefits.
India’s $300 billion IT industry is moving to capture the “deployment layer” to execute the messy, unglamorous work needed to make artificial intelligence actually profitable.
After decades of running technology systems for global banks, retailers, airlines, and hospitals, Indian IT companies including Tata Consultancy Services, Infosys, Wipro, and Tech Mahindra are banking on their strong client relationships and enterprise experience to implement AI at scale. If they succeed, it will reshape who captures the biggest profits from the AI boom.
An August 2025 MIT Media Lab report said 95% of generative AI pilots at companies fail because of flawed integration and a “learning gap” between available tools and the teams implementing them. Even as 90% of executives experiment with AI, 60% say the data and technologies at their companies are not ready, according to a 2026 Bain survey .
“The IT industry’s real value is the context and understanding of every enterprise’s business and technology landscape, and making the right technology work inside the processes,” N. Chandrasekaran, chairperson of the Tata Group, which owns TCS, said at the India AI Impact Summit in New Delhi in February. “AI will expand that role much further.”
Familiarity alone is not enough. Being close to systems is not the same as being close to the decisions that matter.”Ashwin Venkatesan, executive research leader at advisory firm HFS Research
This repositioning puts Indian IT companies in direct competition with American consulting giants such as Accenture, Deloitte, and McKinsey. Indian firms will need to go beyond just executing projects to helping clients make technology choices, redesign workflows, govern agent behavior, and tie outcomes to business metrics.
“That is a materially different role from what most of these [Indian IT] firms have historically played,” Ashwin Venkatesan, executive research leader at advisory firm HFS Research, told Rest of World.
TCS, which employs nearly 600,000 people, manages core technology systems for some of the world’s largest companies, including Citibank, General Motors, Johnson & Johnson, and Rolls-Royce. Infosys, with around 320,000 employees, counts Goldman Sachs, Apple, and Mastercard among its clients. Together with Wipro, HCLTech, Tech Mahindra and others, these firms lead an industry that has quietly run the technology backbone of Western business for decades.
N. Chandrasekaran, chairperson of Tata Group, at the India AI Impact Summit in New Delhi in February.
Still, an India IT pivot is not assured and fraught with risk. That mastery of back-office tech automation is also considered a liability as agentic AI eats away at the need for outsourcing. The threat became so apparent to the market that India’s benchmark IT stocks index slumped nearly 6% in early February, after Anthropic launched its Claude Cowork agentic plug-in designed to automate high-volume, repetitive knowledge work. If Indian IT firms successfully implement AI agents that do the work of 500 offshore employees, they could effectively destroy their own legacy revenue streams.
The messy middle
The U.S. discourse on AI has been dominated by companies creating advanced large language models — OpenAI, Google, Anthropic. Beneath it is a bottleneck of chaotic data built up over decades, aging legacy software, compliance requirements, and a shortage of people who understand both the technology and the business context it needs to operate.
Indian IT companies could step in as the “middle person” to navigate these challenges, Venkatesan said .
“The real question in enterprise AI is not who builds the most capable model. It is, ‘Who can make AI work inside messy, complex enterprise environments that have accumulated decades of process debt, data debt, technology debt, and cultural debt?’” he said. “That is precisely the terrain Indian IT firms know best.”
Referring to this as a “deployment gap,” Nandan Nilekani, co-founder and non-executive chairperson of Infosys, India’s second-largest IT company, said AI technology is far ahead of its actual use inside large corporations. This offers an opportunity for companies like his, he told investors at Infosys’ AI Day in February .
“Somebody was telling me the other day that there are some old systems and, on contract, they have guys as old as me — 70, 75-year-old guys — because nobody else knows what the hell is going on,” Nilekani said. “The tech will keep getting better and better because billions are going to be poured into it; there is a massive competition. But enterprise deployment is not going to go up, and this deployment gap is what we can help to address.”
The numbers support the pivot.
TCS reported over $2.3 billion in annualized AI services revenue during the first quarter of 2026 — roughly 7.5% of its total revenue , up from $1.8 billion in the prev…
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