Artificial intelligence has moved beyond experimentation and is becoming the core growth engine for HCL Technologies. During the company’s Q1 FY27 earnings call, C Vijayakumar, Chief Executive Officer and Managing Director, HCL Technologies made it clear that the company is repositioning itself as an AI-first technology company, with investments spanning AI services, proprietary platforms, sovereign AI, enterprise language models and AI data centres.
“We began FY27 with a focus to grow our advanced AI-led offerings, increase our relevance with clients, capitalize on the full range of AI-related market opportunities in our pursuit of becoming the world’s best AI solutions provider,” Vijayakumar said at the start of the earnings call.
The strategy is already translating into revenue. HCLTech’s advanced AI business generated $171 million during the quarter, growing 10.6% sequentially and 62.1% year on year, reflecting rising enterprise demand for AI transformation projects.
According to Vijayakumar, the enterprise AI market is now splitting into two distinct opportunities. Traditional IT services are increasingly being automated by AI, while demand for AI-native and AI-amplified services continues to accelerate.
“Our intent is very clear, benefit disproportionately from the AI-native and AI-amplified opportunities, which together represent the fastest growing pool of enterprise spend, while in AI-disrupted services, we intend to innovate faster than the market to stay ahead of the deflationary curve rather than be defined by it,” he said.
A major pillar of HCLTech’s AI strategy is enterprise adoption through its AI Force platform. The company said AI Force is now deployed across 92 client accounts, helping enterprises embed AI into existing IT operations. During the quarter, HCLTech also expanded its portfolio of industry specific AI offerings to 23 solutions, while crossing 1,000 AI engagements through its AI Labs business.
One of the strongest themes emerging from the earnings call was sovereign AI. Vijayakumar argued that enterprises increasingly want to retain ownership of their data, intellectual property and AI models instead of relying entirely on public large language models.
“The evolving enterprise AI architecture is based on two broad principles. One is zero trust, that is the default posture is that no data, no prompt or context ever leaves the enterprise boundary,” he said while explaining HCLTech’s hybrid AI architecture built around private small language models and secure AI gateways.
The company believes enterprise demand is shifting towards smaller, specialised AI models trained on proprietary enterprise data rather than generic frontier models.
“While the world’s attention has been captured by ever larger general purpose models, the real value for enterprise often lies in smaller specialized models trained deeply on the language, data and workflow of a single industry or a client,” Vijayakumar said.
To strengthen this strategy, HCLTech recently invested $150 million in Sarvam, India’s sovereign AI company, while also expanding partnerships with Google Cloud, AWS, OpenAI, Intel and Red Hat to accelerate enterprise AI adoption.
Perhaps the biggest strategic announcement was HCLTech’s decision to enter the AI data centre business. The company plans to invest up to Rs 3,500 crore initially, with long term plans to scale to 50 MW of AI capacity.
“The biggest opportunity is not to rent AI but to own the full stack: the datacenters, the compute, the models built to address client specific needs. As demand grows and supply catches up, the players who win will be the ones who offer full stack offerings,” Vijayakumar said.
During the analyst interaction, Vijayakumar also highlighted that enterprises are becoming increasingly sensitive to AI token costs and data privacy. He said organisations are moving towards hybrid architectures combining private small language models with selective use of frontier AI models, creating a fresh engineering opportunity for IT service providers.
“We think it will be like another engineering services wave that we can create by really pursuing our strategy on a hybrid AI stack,” he said.
Looking ahead, Vijayakumar expects AI-native services to continue growing much faster than traditional IT services, with sovereign AI, industry-specific language models and AI infrastructure emerging as HCLTech’s next major growth drivers.
