India's largest software exporter is betting heavily that artificial intelligence will generate new revenue streams rather than cannibalize its core outsourcing business. Tata Consultancy Services intends to deploy up to 8,900 forward-deployed engineers and is actively pursuing acquisitions in AI, data security, and cybersecurity, two senior executives revealed in an interview with Reuters. Main Developments CEO K Krithivasan outlined plans to have 1% to 1.5% of TCS's workforce serve as forward-deployed engineers, translating to roughly 5,900 to 8,900 employees based on the company's end-June headcount. These specialists embed directly with clients to accelerate AI adoption and tailor tools to specific business needs. CFO Samir Seksaria confirmed the company is evaluating acquisitions after years of relying predominantly on organic growth. "We are looking at where we can find things which will help us enable or enhance our strategic positioning," he said, adding that TCS spends roughly $1 billion annually on talent development and making AI accessible internally. Read also: Ukraine Drone Strike Hits Empty Russian Tanker in Azov Sea Background The strategy emerges against a backdrop of investor concern that AI could disrupt India's $315 billion IT services industry. Potential disruptions include reduced demand for engineering teams, shortened project timelines, and squeezed prices as clients seek a share of productivity gains. TCS had largely shunned acquisitions until late 2025, preferring organic expansion. Krithivasan did not specify whether the company would hire externally or retrain existing staff for the forward-deployed engineer roles. The plan positions TCS against competitors like OpenAI, Anthropic, and Microsoft, which have similarly expanded hiring for engineers who help clients deploy AI tools. Why It Matters Krithivasan dismissed concerns that AI would disrupt the outsourcing model, arguing companies still need partners to integrate and deploy AI systems. "What you need is a deep knowledge of the customer environment to make it work. That is where we differentiate ourselves," he said. He emphasized that TCS's value lies in its talent pool rather than cost arbitrage, as clients increasingly use multiple AI models requiring integration with existing systems and data management. Despite the bullish outlook, TCS's annualized AI revenue growth slowed to 13% in the first quarter from 28% in the previous quarter. Krithivasan expressed a long-term goal of roughly 25% quarter-on-quarter growth but acknowledged the trajectory would not be linear. What's Next TCS will continue evaluating acquisition targets in AI, data security, and cybersecurity to enhance its strategic positioning. The company's $1 billion annual investment in talent development and internal AI accessibility will support training, targeted hiring, and niche recruitment in AI-native technologies. Krithivasan expects the forward-deployed engineer team to grow over time as AI adoption among clients accelerates.