Could These Tech Stocks Help India Catch Up in the AI Race?

Is India’s AI momentum — led by its tech powerhouses — enough to challenge the global frontrunners?

Apr 23, 2025

AI spending in the US and China has dwarfed that of other countries; India is in fourth place globally.
Tech companies have emphasized India’s potentially central role in the development of AI, thanks to both its large market and high level of talent.
Indian IT providers Infosys, Wipro and Tata Consultancy Services are already seeing an uptick in business thanks to AI implementation.

Two years after OpenAI’s ChatGPT kicked off the generative artificial intelligence (AI) frenzy, India has realized it is in danger of being left behind and has started to build a large language model (LLM) of its own.

Speaking at the AI Action Summit in Paris in February, Prime Minister Narendra Modi stated that the country is pooling its resources and will make the LLM available at an affordable cost.

“India is ready to share its experience and expertise to ensure that the future of AI is for good and for all,” said Modi at the summit.[1]

His government announced a five-year, $1.2bn AI strategy, IndiaAI, which includes making 10,000 GPUs available to researchers and start-ups.[2]

This piece will look at how three of India’s leading IT services providers — Infosys [INFY], Wipro [WIT] and Tata Consultancy Services [TCS:NS] — are adopting and investing in AI.

The State of AI Play in India

Despite the Indian government’s bold plan, AI investments made by the country’s leading tech companies are small compared to the amount US and Chinese counterparts have spent.

Over the past 10 years, India’s AI start-ups have received investments totaling $21.8bn, compared to the $455bn and $92.7bn that has been invested in their US and China peers, respectively, as the graph below shows.[3]

Cumulative AI Funding by Country, Past 10 Years

There is capital to be spent, but there has also been friction. Back in 2023, OpenAI’s Sam Altman told India’s start-ups that it was “totally hopeless to compete with us on training foundation models”.[4]

However, in February 2025, Altman revealed that India had become his LLM’s second-biggest market, with users in the country tripling in the past year. In a reversal from his previous comments, Altman said he believes India “should be doing everything … should be one of the leaders of the AI revolution”.[5]

The tech world does seem to be waking up to the important strategic role India could play. Nvidia [NVDA] CEO Jensen Huang declared the country’s talent was “unmatched” during the chipmaker’s AI Summit in Mumbai last October.[6]

“It makes complete sense that India should manufacture its own AI,” said Huang, adding that its AI strategy was a good example of sovereign AI, where countries develop their own AI infrastructure to retain control of its data.

The other two areas where India could flourish, added Huang, are agentic AI, where knowledge-based work is automated, and physical AI, the industrial application of AI, such as in the form of robotics.

Where do Infosys, Wipro and Tata Consultancy Services fit into India’s AI ecosystem?

INFY vs WIT vs TCS:NS Fundamentals Comparison

Tata Consultancy Services

Year-to-date: -18.87%

Past 12 months: -12.99%

India’s top IT services firm reported its annual revenue had exceeded $30bn for the first time in fiscal 2025 and had an uptick in AI projects to thank for it.[7]

CEO K. Krithivasan told analysts on the earnings call earlier this month that AI and generative AI are both “gaining a lot of traction and momentum”.

The focus for most clients in the short and medium term is on integrating AI into their IT systems to improve productivity and save money. But Krithivasan sees them adopting generative AI more broadly across their business in the long term.

“AI for business is picking up a lot of traction,” he added. “People are trying to see which are the use cases in the entire value chain where they can deploy AI to improve customer experience [and] speed.”[8]

Infosys

Year-to-date: -23.08%

Past 12 months: 3.5%

India’s second-biggest IT services provider is banking on AI for long-term growth.

“We are seeing growing demand from clients to partner with them on AI. They are moving from a use case approach to an AI-led transformation approach,” said CEO Salil Parekh at Infosys’ Q4 2025 press conference on April 17.[9]

The company has developed over 200 agents and is currently working on more than 400 AI projects for clients. Its customers are implementing AI across customer service, employee productivity and engineering.

Parekh added that generative AI has become part of all deal discussions and is “making a big difference in how those deals are developed.”

Despite Infosys’ optimism around AI, Q4 profit fell 12% as enterprises cut their IT spending.

Wipro

Year-to-date: -21.75%

Past 12 months: 5.52%

Rival IT services provider Wipro echoed Infosys in its Q4 2025 earnings on April 16.

CEO and Managing Director Srini Pallia said that he expects clients “to take a more measured approach” when it comes to spending. One client has already paused a digital transformation project, “because they wanted certainty”.[10]

Nevertheless, the company secured 17 large deals alone in Q4 for a total value of $1.8bn. The total signed in the fiscal year was 63 for a value of $5.4bn, up 17.5% year-over-year.

“As we all know, AI has been part of deal conversations for a while. But this year, it has actually become central to almost every opportunity, big or small,” Pallia added.

At the end of March, Wipro announced a partnership with Nvidia to help enterprises and governments around the world to maintain data sovereignty.[11]

Conclusion

India has fallen behind the US and China in the AI race and is pinning its hopes on building its own LLM to help it to catch up. IT services providers Infosys, Wipro and Tata Consultancy Services are playing a critical role in helping India’s enterprises to adopt and implement AI.

This is for informational purposes only. OPTO Markets does not recommend any specific securities or investment strategies. Investing involves risk and investments may lose value, including the loss of principal. Past performance does not guarantee future results.

[1] https://x.com/ians_india/status/1889250658936611092

[2] https://web-assets.bcg.com/5e/2c/2eb053c141ed93a3d46ac0e00e59/unlocking-the-potential-of-ai-in-india.pdf

[3] https://tracxn.com/d/sectors/artificial-intelligence/__cbMnXfS2GfFo4Vi2dxZyUy7l4O8WyzVYLseb9keW5cI

[4]