Tata Consultancy Services plans to build a team of up to 8,900 forward-deployed AI engineers and is looking for acquisition targets in AI and cybersecurity, chief executive K Krithivasan said.

The move is India’s largest IT firm answering the question that has hung over the sector since the arrival of agentic AI in enterprise stacks, which is whether the industry that sells engineering hours has anything left to sell.

Krithivasan said TCS aims to convert between 1% and 1.5% of its associate base into forward-deployed engineers. Against a headcount of 593,798 at the end of June, that works out at roughly 5,900 to 8,900 people.

The term is borrowed from the AI labs, where forward-deployed engineers sit inside the client’s business and make the model actually do something. Chief operating officer Aarthi Subramanian described them as specialists who are multi-skilled but deep in one particular area, which is a polite way of saying they are the people sent in when the pilot does not survive contact with production.

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Krithivasan has framed the programme as evidence that AI creates jobs rather than destroys them. He did not say whether the engineers will be hired externally or retrained from within, and on a base of nearly 600,000 people, that distinction is the whole story.

TCS added 9,279 employees in the June quarter, its second consecutive quarter of headcount growth after a stretch of contraction. Net profit rose about 5% year on year to ₹13,349 crore, on revenue up 14% to ₹72,275 crore, with an operating margin of 24%.

“Q1 FY27 reflects continued growth momentum and the strength of our strategic positioning, despite geopolitical and macro-economic headwinds,” Krithivasan said alongside the results, which also carried a ₹12 interim dividend. Growth of 14% is not the profile of a company being hollowed out, though it is also not yet the quarter in which the theory gets tested.

The company reported an order book of $9.5bn for the quarter, including an AI-led transformation deal with the Swedish bearings maker SKF, and said its AI business is now running at a $2.6bn annualised revenue rate, per its own results statement. That last figure is the one investors will test, because it is the only line that distinguishes AI revenue from the rest.

The anxiety it is meant to answer is straightforward. India’s $315bn IT services industry sells effort, and clients who believe AI shortens projects will expect a share of the productivity gain to show up as a lower price.

Acquisitions are the second half of the answer. Krithivasan said TCS is scanning for targets in AI and cybersecurity, though the company named no candidates, gave no budget, and set no timeline.

TCS is not alone in trying to sit closer to the model layer. Anthropic’s $100m Claude Partner Network pulled Accenture, Deloitte, Cognizant and Infosys into its enterprise ecosystem in March, which tells you where the integrators think the margin is going to sit.

India, meanwhile, is trying to move up the stack in hardware as well as services, with CG Semi beginning commercial chip production at its $870m Gujarat plant this month. The services giants and the fabs are, for once, chasing the same customer.

What TCS has not disclosed is how the forward-deployed engineers will be priced. Consulting firms have historically billed by the hour, and an engineer whose job is to make a model replace hours is an awkward thing to put on a rate card.

The company will report again in October. By then the useful number will not be 8,900, but whether the $2.6bn AI run rate has grown faster than the business it is supposed to be cannibalising.