Tata Consultancy Services is partnering with TPG to create AI and Sovereign Data Centers, investing $2 billion. This marks a significant shift in TCS's business model.

Tata Consultancy Services (TCS) is set to form a joint venture with private equity firm TPG, investing around $2 billion to create AI and Sovereign Data Centers. This initiative marks a significant shift for TCS, which has historically favored a capex-light growth strategy. TCS will hold a 51% stake in the new venture, HyperVault AI Data Centre Ltd, which aims to build up to 1.2 GW of capacity over the next five to seven years. The project is expected to generate revenue within 18-24 months. This move comes as TCS faces challenges in adapting to AI disruptions, having recently laid off 1% of its workforce. The data center market is projected to grow significantly, with TCS's investment positioning it against major competitors in the sector.