Tata Communications Ltd will launch by March its AI Studio platform-as-a-service, which will be built on top of the AI Cloud it introduced in partnership with Nvidia late last year, according to chief executive officer and managing director A.S. Lakshminarayanan.
The platform will provide services including data management, multimodal retrieval augmented generation (search using text, photo, video, etc), machine learning operations capabilities for hyperscalers (large cloud service providers), enterprises, startups and government entities, on a subscription basis.
“We are in early-stage trials of AI Studio with some customers. The launch, we expect it to happen later during this quarter,” Lakshminarayanan said in an interaction with Mint Wednesday following the digital communications provider’s third-quarter results. “We believe that the first take up would be with a lot of people who are investing in model building, that are currently mostly startups.”
There’s a lot of potential in the government to “do model building and use it for Indian citizens”, he said. “Enterprises would see how to use these models to efficiently deploy for their businesses, which is where people are going to be initially experimenting before moving to production.”
The top executive added that the AI cloud capacity will be rolled out over 2025 and would be scaled up depending on the demand by enterprises and their ability to deploy AI and develop business cases. US-based Nvidia and Tata Communications are developing an AI cloud in India using Hopper and Blackwell graphics processing units (GPUs), aimed at providing critical infrastructure. The partnership includes delivering AI computing infrastructure and platforms for developing AI solutions, which will be used by enterprises, such as Tata Consultancy Services Ltd (TCS).
Lakshminarayanan said the company was "waiting and watching out" for the impact of US President Donald Trump’s swathe of executive orders, on its US operations, which include acquisitions of The Switch, a video production company, and Kaleyra, a messaging and communication platform. Mint reported in October 2023 that Tata Communications was aiming for the US business to be worth $1 billion by 2026.
“We are quite hopeful that the (Trump) administration is going to be more business friendly. We already have a good footprint of capabilities in the US, by way of infrastructure that we've created by acquiring Switch and creating production capabilities there,” Lakshminarayanan said. “We have landing stations and small data centres where we are offering services already. None of the announcements are going to be, in a way, either detrimental or become a reason for becoming over optimistic.”
Lakshminarayanan said the proposed $500 billion AI infrastructure project, called Stargate, will open up an opportunity for the company’s edge computing capabilities; for instance, building nodes on the lines of the infrastructure it has built for its media business.
“In our AI cloud continuum, one of the capabilities that we've been working on is the edge capability. It's just something that we are rolling out in our media business; some are already in the US, and it will be relatively easy for us to put the inferencing capability on that edge so we can participate,” he said. “We are prepared for it as and when there is a demand, we can add more capabilities to that in terms of physical infrastructure.”
On being asked whether US’s Stargate will have any ramifications on its ongoing investments in AI cloud infrastructure being built in India with Nvidia, he said, “Ultimately, we believe that every country is going to look at how they will get some sovereignty with respect to AI. People only want to expose their data to markets outside their own country, and allow somebody else to monetize it from that data. We think there is going to be a market in India, regardless of how much the US invests in its own AI.”
The company will bring in third-party investors in its North Carolina-based subsidiary NetFoundry, which will lead to a majority stake dilution, as it continues with its strategy to review its subsidiaries that were dragging down profitability and monetize the non-core assets.
It divested its full stake in subsidiary Tata Communications Payment Solutions Ltd for ₹330 in November 2024. It is also looking to sell land parcel to STT Datacenter for ₹750-800 crore and has got shareholders’ approval. Tata Communications has a 26% stake in STT Datacenter.
Tata Communications reported a ₹236.8 crore profit for the quarter ended December 2024, up 424% from a year ago, but a marginal growth from the September quarter's ₹227.3 crore.
Lakshminarayanan attributed the on-year rise in profits to a comparison disparity due to a one-off charge in the December quarter of 2023 from a Supreme Court judgment, which had led to a sharp fall in profits in that quarter.
Revenues from operations stood at ₹5,798.07 for the quarter ended December, up 3.76% on-year from ₹5,587.78 crore reported during the year ago quarter. The September quarter revenue stood at ₹5,781.47 crore.
The earnings before interest tax depreciation and amortisation (Ebitda) was ₹1,181 crore, up 4.1% compared to ₹1,134 crore in the year ago quarter.
Ebitda margin rose 23 basis points (bps) to 20.4% from 20.1%, sequentially. A basis point is one-hundredth of a percentage point.
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