MUMBAI: Cognizant Technology Solutions Corp. is taking a different tack in artificial intelligence (AI), betting that better-designed solutions, not just lower costs, will win deals at a time when automation is raising fears of revenue pressure in IT services.
Teaneck, New Jersey-based Cognizant says it is focusing on designing and executing AI projects better than rivals, rather than relying mainly on price cuts to win business.
“So this is something that we are very careful when we first review the deal before we submit our bids. We look at very carefully how the need is constructed, and what is the solution because you don't win some of these deals on price point. I mean, that's one of the factors, but it's also how well made and how well thought through your solution is for customer, makes a big difference,” said Jatin Dalal, chief financial officer, Cognizant, during a fireside chat with James Faucette in the Morgan Stanley Telecom, Media, and Technology Conference on Tuesday evening.
Dalal said the company reviews deal requirements rigorously before bidding and tracks performance. “So one is we review it (the deal requirements) very well, and then we track it through a process called bid versus did on a monthly basis, the CEO of the company and I review it every month.”
Dalal was among the first leaders to join Cognizant after Ravi Kumar took over as chief executive in January 2023. He took over as chief financial officer in December 2023.
Cognizant’s delivery excellence team also reviews whether the productivity measures anticipated in contracts are being deployed as planned.
“There are at least four or five very detailed workshops that we do with customers to decide what is the right answer, from a solutioning standpoint, to very specific customer contacts and therefore there is very little surprise from the customer standpoint on what to expect when we start deploying the solution,” added Dalal.
A different play from Infosys
Cognizant’s approach differs from Infosys Ltd, which has leaned on offering productivity benefits to clients.
According to a Mint report dated 25 August 2025, the Bengaluru-based company is relying on quick project execution and strong delivery to show AI-led savings early. It hopes this will help it win longer-tenured deals and additional work.
Cognizant, which follows a January-December financial year, reported revenue of $21.12 billion in 2024, up 6.95% year-on-year – faster than Infosys (3.9%) and HCL Technologies (5.1%), while Tata Consultancy Services and Wipro saw revenue decline.
For now, customers seek certainty in their investment and outcome, which Dalal said resulted in a rise in fixed price contracts.
“I think this is a better model for our customer when, when there are a lot of things changing around them, and it is difficult for them to anticipate the sort of total cost of ownership they would be able to achieve in a time and material basis. This is a certainty of outcome that we are able to give most of the time,” said Dalal.
Nearly half of Cognizant’s full-year revenue last fiscal, about $10 billion, came from fixed-price contracts. While Dalal did not elaborate on revenue or margin contraction risks, he said fixed-price deals offer a building block to improve margins.
AI revenue and deployment gap
Cognizant does not disclose revenue from automation, even as TCS, Infosys and HCLTech report AI-related numbers. TCS reported annualized AI revenue of $1.8 billion as of December. Infosys and HCLTech reported AI-related revenue and advanced AI revenue of $280 million and $146 million, respectively, during October-December 2025.
However, the management added that AI-led work, which were once trial runs, was now shifting to proper deployments. This increase in AI adoption also led to an increase in legacy modernization deals which are essential for clients to run AI tools.
Dalal’s comments come a little more than a fortnight after Infosys chairman Nandan Nilekani said AI technology development has outpaced the tech capabilities of large companies.
“The main thing is that the technology is far ahead of its deployment. Because of this race and spending billions on some AGI (artificial general intelligence) and all that, the technology is moving faster than the ability of enterprises to deploy it,” said Nilekani at the company’s first investor day on 17 February.
Cognizant, which is in the middle of a turnaround after three mega deals last year, is aiming to gain AI market share this year. It expects revenue of $22.14 billion to $22.66 billion in the current fiscal, implying annual growth of 4.9-7.4%.
Cognizant’s approach comes at a time when investors fear AI deals could shrink revenue and pressure profitability.
Automation tools require fewer humans for software development and maintenance, reducing billable effort. Anthropic’s launch of AI tools that automate parts of legal research and software development rattled IT stocks, which fell more than 20% last month.