India’s top technology services companies are riding the AI wave with chip giant Nvidia, betting on mutually beneficial partnerships like those they have with software giants SAP AG and Oracle Corp.
Tata Consultancy Services Ltd (TCS), Infosys Ltd, Wipro Ltd and Tech Mahindra Ltd announced or expanded their partnerships with Nvidia last week, when their founder and CEO Jensen Huang visited India. While TCS launched a new business unit in collaboration with Nvidia for industry-specific AI solutions, Infosys introduced two small language models trained on customer-specific data sets based on Nvidia platforms. Wipro announced out-of-the-box AI-based templates for customers based on Nvidia AI platforms, while Tech Mahindra launched a center of excellence powered by Nvidia platforms to help customers adopt enterprise AI models.
Earlier this month, Accenture Plc, the world’s largest software services provider, launched the Nvidia business group, under which 30,000 of its employees would be trained to help clients scale adoption of enterprise AI based on Nvidia platforms. .
Everyone wants their chips
“IT services companies are partnering with Nvidia because everyone wants their chips, which are basically their graphics processing units (GPUs). “Fortune companies know that Nvidia chips work best when they are integrated into Nvidia software and platforms and they want to use this package as part of their AI workflows,” said an analyst at a national brokerage on condition of anonymity. “That’s why these companies are using IT service providers as systems integrators.”
The fight over AI-AI partnerships comes at a time of uncertainty about the technology’s rollout across the industry, nearly two years after the launch of ChatGPT brought Gen AI into boardroom discussions.
In addition to its core AI chips, some of Nvidia’s offerings include Nvidia AI Foundry, Nvidia Omniverse, and Nvidia AI Enterprise, all designed to help customers integrate AI into their work. While Nvidia Omniverse helps developers create 3D applications and services, AI Foundry helps create custom Gen AI models. Nvidia AI Enterprise is a cloud-native software platform.
According to a second analyst, these partnerships also help Nvidia build its ecosystem.
“This is beneficial for both parties (IT services companies and Nvidia). “IT services can generate more business by leveraging the growing demand for Nvidia’s AI chips and platforms from its customers, and Nvidia will expand its ecosystem by partnering with more IT services companies such as system integrators,” said an analyst. based in Singapore on condition of anonymity.
Both analysts agreed that these partnerships were similar to similar ties with SAP and Oracle. IT services companies customize and integrate SAP and Oracle software into their clients’ systems, helping large companies manage human resources, accounting systems, and supply chain management.
“This is exactly what IT services companies did with the SAP and Oracle partnerships, where the service providers were system integrators of the software that the two companies (SAP and Oracle) had to offer,” the analyst said with headquarters in Singapore.
A name for chip design
Nvidia made a name for itself by designing a computer chip widely used in video games as it could render images efficiently. However, its secret sauce was chips capable of handling complex computing demands, along with the software required by AI processes. Nvidia, which was worth $275 billion just before the launch of ChatGPT, is now worth $3.47 trillion, briefly surpassing Apple Inc. on Friday to become the world’s most valuable company.
“While its competitors are investing in building their own infrastructure, Nvidia is still well ahead of the rest of the market and attracting the attention of ambitious service providers eager to develop their AI transformation capabilities,” said Phil Fersht, CEO of HFS. Research, based in the US, an outsourcing research company.
Nvidia derives most of its revenue from the data center market, which generates 87% of its total revenue. In the quarter ending July 2024, Nvidia reported revenue of $30 billion, a sequential increase of 15%. To put this in perspective, Nvidia makes as much revenue in a quarter as TCS, which is India’s largest software services company, does in a year. Nvidia’s data center business includes its chip business, cloud-based solutions and other computing platforms.
While TCS claims to have trained more than half of its 600,000-person workforce in AI, machine learning and Gen AI, Infosys claims to have trained more than three-quarters of its workforce in Gen AI skills. Still, both the companies, which are India’s two largest software services companies, have not disclosed the business they get from GenAI.
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