Infosys signs five-year AI deal with $2 billion target spend

IT major Infosys has won a USD 2 billion five-year deal with an existing client. The agreement is to provide automation-based modernization and artificial intelligence (AI), and maintenance services, according to its exchange filing late Monday.

The Bengaluru- headquartered firm did not disclose the name of the client. “Infosys has entered into a framework agreement with one of its existing strategic customers to provide AI and automation led development, modernization and maintenance services. Total target client spend over 5 years is estimated at USD 2 billion,” the filing said.

This comes a few days ahead of its first-quarter results scheduled to be announced on Thursday, Infosys estimated its growth around financial '24 to be around 4-7%, the slowest revenue expansion in six years. A few brokerages also expect the upper end of the guidance to be trimmed due to weak macros.

Large IT service companies have frequently announced large deals in recent weeks. Last month, Infosys signed a digital transformation deal with Nordic-based Danske Bank, worth USD 454 million over five years.

The Bengaluru-based software exporter will acquire the lender's IT center in Bangalore, which employs 1,400 people. The deal, which may be extended for a further three years, aims to accelerate Nordic-based bank’s digital transformation initiatives with scale.

Tata consultancy Services, also in June, announced that it had bagged a USD 1.9 billion deal from UK workplace pension scheme NEST to digitally transform its scheme administration services. In May, Infosys won a USD 1.5 billion deal from global energy giant BP for five years. It said the deal is the largest it has won in the last three years.

TCS beat estimates while reporting a 16.7% year-on-year increase in net profit to Rs 11,074 crore for the fiscal first quarter, but India's top software exporter warned that the demand outlook remains " soft and uncertain" for the near term with clients withholding spending on discretionary and non-critical projects.

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