Decoding the AI spending spree of India’s IT sector

The third-quarter results for the 2025-26 fiscal year mark a watershed moment for the Indian IT sector. No longer just experimental, artificial intelligence has become a core revenue driver. The "Big Four", TCS, Infosys, HCLTech, and Wipro, are now reporting significant portions of their revenue from AI-related services while simultaneously deploying billions in capital to build the infrastructure of the future.

While these firms often bundle research and development (R&D) costs into broader capital expenditure (CapEx), current data suggests a collective multi-billion dollar commitment toward AI-first delivery models.

The spending and pipeline landscape

Tata Consultancy Services (TCS): The infrastructure powerhouse

TCS continues to act as the industry’s anchor, reporting USD 7,509 million in revenue for Q3 FY26. However, the standout figure is the USD 1.8 billion generated from annualised AI-related services, a 17.3% sequential jump.

TCS is moving beyond software to address the global shortage of AI compute. Through the "HyperVault" project, a USD 2 billion joint venture with TPG—TCS is building gigawatt-scale, AI-ready data centres. These facilities are designed to host massive GPU clusters, providing a sovereign cloud for clients with extreme security needs.

To feed this infrastructure, TCS has upskilled 217,000 associates. The company’s "Rapid Builds" program is now the standard for moving client pilots into production, specifically targeting the energy and utilities sectors where high-performance computing is critical.

Infosys: The AI software factory

Infosys reported revenue of USD 5,100 million, but its real story lies in developer productivity. The company has moved from manual coding to an "AI-first" factory model, generating over 28 million lines of code using automated tools.

The centerpiece of this strategy is "Topaz Fabric," a composable stack that allows enterprises to build custom AI agents. Through a partnership with Cognition, Infosys has integrated "Devin", an autonomous AI software engineer, into its workflow. This allows Infosys to handle 4,600 active AI projects with a leaner, more specialised team.

Despite the automation, Infosys added 5,000 net employees this quarter. These "forward-deployed engineers" act as on-site consultants, ensuring that the AI agents they build are ethically aligned and customised to the client’s specific business logic.

HCLTech: Pioneering ‘Physical AI’

HCLTech reported a robust USD 3,793 million in revenue, with its "Advanced AI" segment growing nearly 20% sequentially. While its peers focus on enterprise software, HCLTech is carving a niche in "Physical AI."

Collaborating with NVIDIA, HCLTech launched the Physical AI Innovation Lab. This facility focuses on:

• VisionX: An industrial inspection system that uses AI to detect micro-defects on factory assembly lines.

• Agentic AI Force 2.0: A platform that manages autonomous robots in warehouse environments.

And, by integrating intelligence into the "edge", the physical machines on a factory floor, HCLTech is capturing a market segment that pure software firms cannot easily reach.

Wipro: Engineering depth and ‘Wipro Intelligence’

Wipro reported USD 2,635 million in revenue, bolstered significantly by the USD 375 million acquisition of Harman DTS. This move adds deep engineering expertise to Wipro’s portfolio, particularly in embedded systems for the automotive and industrial sectors.

Wipro’s AI strategy is centralised under the "Wipro Intelligence" suite, which includes two key platforms:

• WEGA: An orchestration platform that ensures AI agents follow strict enterprise governance and data privacy rules.

• WINGS: A project delivery platform that uses AI to predict and mitigate risks in large-scale digital transformations.

In terms to support global demand, Wipro is opening new innovation labs in theUS, Australia, and the Middle East, positioning itself as a localised partner for governments and multinationals seeking AI-led transformation.

The shift in capital allocation

The Q3 results show a fundamental change in how these firms spend money. Historically, the largest expense was employee salaries. In 2026, a growing percentage of the budget is shifting toward GPU procurement, data centre energy contracts, and strategic acquisitions.

As AI moves from "chatting" to "acting" through agentic systems, the Indian IT sector is no longer just a service provider, it is becoming the infrastructure layer for the global digital economy.

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