Business APAC,
May 13, 2025
In a strategic pivot that’s turning heads across the global tech industry, Infosys, India’s second-largest IT services company, has announced a bold investment of $2 billion in AI and automation technologies—despite reporting a 7.3% decline in Q4 FY24 profits.
This move signals a crucial shift for the Bengaluru-based giant as it navigates an increasingly competitive and cautious global tech market.
Infosys Q4 FY24 Results: What the Numbers Say
Infosys’ consolidated net profit for Q4 FY24 stood at ₹6,128 crore (~$736 million), down from ₹6,586 crore the previous year. Revenue for the quarter dropped to $4.56 billion, reflecting a 1.3% YoY decline and a softening demand across its core markets, particularly in North America and Europe, which contribute over 60% of Infosys’ revenues.
CEO Salil Parekh, addressing analysts, called the slowdown a “wake-up call” for traditional IT services. “We are at a pivotal moment. Clients are looking for transformative solutions, not just cost optimization,” he said during the earnings call.
Turning the Tide: Infosys Invests $2 Billion in Generative AI.
In a bold strategic move, Infosys revealed plans to:
- Invest $2 billion over five years in AI, machine learning, cloud, and automation.
- Develop a proprietary Large Language Model (LLM) tailored for enterprise-level use cases.
- Expand its AI-focused workforce by 15,000+ hires globally.
- Partner with academic institutions and AI labs in India and the US for R&D.
“We’re not chasing hype—we’re building capability,” Parekh added. “Our clients demand secure, explainable, and results-driven AI. That’s where we’re focusing.”
The AI race is intensifying globally, with Accenture, TCS, and Capgemini all betting big on automation. But what makes Infosys stand out is its focus on building AI for enterprises, not consumers.
A recent Gartner report found that enterprise-focused generative AI is expected to grow at a CAGR of 36% until 2028, reaching a market value of $98 billion. Infosys wants a substantial piece of that pie.
Flashback: A Legacy of Reinvention
Infosys has reinvented itself before—from Y2K to cloud migration. In the 1990s, co-founder Narayana Murthy famously guided the company through economic sanctions and skepticism to become India’s first listed software exporter on NASDAQ.
Today, that same legacy drives its AI push. Murthy’s belief—“Progress comes from questioning the status quo”—resonates more than ever.
Analyst Reactions
Sanjeev Hota, VP of Research at Sharekhan, says:
“Infosys is playing a long game. AI won’t fix quarterly results overnight, but it sets the stage for future resilience and profitability.”
Morgan Stanley analysts upgraded Infosys to “Overweight,” citing its proactive AI investments and healthy operating margins.
What’s Next?
- Infosys plans to roll out AI-driven pilot projects with key clients like Vodafone, JPMorgan, and Siemens.
- The company is setting up AI innovation hubs in Bengaluru, Silicon Valley, and London.
- Colleges like IIT-Madras and Carnegie Mellon have partnered with Infosys on AI ethics and training modules.
Conclusion: AI as the Comeback Catalyst?
Infosys may have stumbled in FY24, but its aggressive AI strategy could redefine its global position in the next five years. With innovation, education, and ethics at the core, this pivot could signal the next big leap not just for Infosys but for the entire Indian IT industry.
Also Read: TEECL Jumps into Digital Age with $1 Billion Data Centre Plan
