The Great Integration: How AI is reshaping Indian IT’s growth, hiring and business models

The term captures a broader realignment of enterprise tech spending, where artificial intelligence (AI) is no longer a niche proof-of-concept but a strategic lever for automation, customer experience re-imagination and core operational redesign. This is reshaping revenue streams and talent strategies across IT majors like Tata Consultancy Services (TCS), Infosys and others, and the latest corporate earnings and hiring commentary offer early signals of demand.

Infosys, which reported its results for the third quarter of 2025-26 last week, offered one of the clearest articulations of this shift. Despite a 2.2% fall in profits, it posted an almost 9 % on-year revenue rise to ₹45,479 crore, driven in large part by stronger AI and cloud transformation deals, and raised its 2025-26 revenue growth outlook to a range of 3–3.5% in constant currency terms.

Its management highlighted large AI-led contract wins across client sectors, including deals that deploy AI-centric platforms which integrate data, workflows and autonomous agents into enterprise environments. This underlines how AI is getting embedded in services that clients are willing to pay for, even as broader demand softness persists.

TCS, leader of the Indian IT services pack, had earlier reported a sizeable profit decline but a 5% on-year revenue growth in its third quarter, underpinned by demand for AI-related services and a rebound in North American markets for the first time in two years.

AI contributed an estimated 5.8% of TCS’s annualized revenue run rate, illustrating that even for a giant with legacy business lines in application maintenance and infrastructure outsourcing, the pull of AI services is growing.

Analysts noted that TCS and its peers are still navigating larger headwinds, including cautious discretionary spending by clients and regulatory costs, even as it realigns its headcount, but the proportion of revenue tied to AI and digital transformation is higher than it was just a few years ago.

These earning outcomes reflect a broader truth: demand is no longer uniformly weak, but is unevenly distributed, with AI adoption and cloud modernization emerging as top growth vectors. Traditional services tied to legacy services have seen slower growth, but where businesses can score gains through Generative AI, automation and data-enabled decision-making, they seem prepared to invest.

This is consistent with global industry narratives that describe 2026 as a point where AI moves from experimentation to scaling and integration—a shift that can expand both total contract values and the strategic footprint of service providers in client organizations.

Campus hiring trends reflect this recalibration. After several years of contraction and cautious recruitment, reports based on industry surveys and LinkedIn sourced trends indicate that firms such as TCS and Infosys are planning significant fresher onboarding, with far greater emphasis on AI, cloud, security and data-centric skills than before. The uptick is not merely in numbers but in the quality and expectations of talent.

Yet, this positive outlook must be tempered with the broader labour market context. A recent survey of tech hiring intentions showed that overall job openings in India’s tech sector slumped sharply in early 2026. This suggests that while demand for AI-related capabilities is rising in pockets, broader hiring stays cautious as recruiters exercise cost discipline. Fresh campus hiring may reflect not only demand optimism but also a strategic imperative to acquire AI-ready talent.

The earnings commentary reinforces this dual narrative. Infosys, while upbeat about its deal pipeline, flagged competitive pressure for specialized skills and noted the impact of labour codes on margins. Investment in reskilling existing staff and integrating AI tools is a priority, as clients now expect partners that can embed intelligence throughout business processes rather than simply provide code or run services. Across the industry, revenue expectations are still modest in aggregate, but its composition is showing a higher-value shift, thanks to AI-related engagements.

Non-Indian IT majors are playing by the same theme. Accenture and others are relying on AI consulting and solutions integration as drivers of future growth, even as they manage geographic and sectoral variability in spending. These players compete with Indian firms for many of the same deals, raising the bar for technical delivery and business outcomes. The competitive interplay is pushing Indian firms to reinforce their AI offerings, invest in partnerships with cloud and platform providers, and retool their market approach accordingly.

In sum, the Indian IT industry’s role in the so-called Great Integration of 2026 is defined by a transition from volume-based services to value-based digital and AI integration. The resumption of campus hiring at scale by firms like Infosys and upward revenue-guidance revisions speak of nuanced confidence: demand may still be tender but the AI opportunity is robust enough.

What is critical is whether this integration will translate into broader hiring, deeper client partnerships and sustained revenue expansion beyond specialized AI projects. If those pieces come together, the story of Indian IT could well shift from cyclical resilience to strategic relevance as technology evolves.

The author is co-founder of Siana Capital, a venture fund manager.