HCL Technologies CEO and MD C Vijayakumar has unveiled ambitious plans to transform AI from a perceived industry threat into a massive growth engine, targeting $2-2.5 billion in revenue from advanced AI-led businesses within the next two to three years. Speaking at the World Economic Forum in Davos, Switzerland, he outlined how the company is positioning itself at the forefront of an unprecedented AI-driven transformation that is reshaping the global technology landscape.

Massive AI Revenue Transformation

HCLTech has emerged as one of the first Indian IT players to separately report AI monetization at scale, currently generating $148 million in advanced AI revenue. This represents a dramatic shift from virtually non-existent AI businesses just a few years ago to what Vijayakumar expects will become a $2-2.5 billion revenue stream.

The 'AI Factory' Billion-Dollar Opportunity

At the heart of HCLTech's strategy lies what Vijayakumar terms the "AI factory" — a comprehensive services opportunity emerging from the massive capital expenditure cycle underway globally. With close to $1 trillion in capex planned or already deployed across hyperscalers and large enterprises, companies require end-to-end services ranging from data center planning and GPU infrastructure to professional and managed services.

"This AI factory business is still small today — probably under $100 million — but we believe it can scale to a billion-dollar revenue stream in three to four years," Vijayakumar explained during his interview with CNBC-TV18.

Physical AI: The Next Trillion-Dollar Industry

Beyond AI factories, HCLTech is betting significantly on physical AI, which extends artificial intelligence beyond software into real-world applications. This emerging sector combines robotics, vision systems, and AI-infused workflows to enable machines to sense, understand, and act on physical environments across use cases such as warehouse automation, port management, and industrial operations.

"Analysts talk about physical AI being a trillion-dollar industry by 2030," Vijayakumar noted. "From a services perspective, this too can be another billion-dollar opportunity for us." The company's long-standing engineering and mechatronics capabilities provide a natural competitive advantage as enterprises transition from digital transformation to physical automation.

Strategic Business Model Evolution

Vijayakumar emphasized that HCLTech's targeted growth represents entirely new service categories attracting fresh discretionary spending, rather than merely AI-enabled modernization of existing IT contracts. The company is also reimagining commercial models, shifting from traditional time-and-material pricing to outcome-based contracts where clients pay for measurable improvements in speed, efficiency, and experience.

Demonstrating AI's practical integration within the organization, 25-35% of coding and development work at HCLTech is now performed by AI systems, showcasing how artificial intelligence is already transforming traditional software development processes and operational efficiency.

Future Growth Strategy

To accelerate its AI transformation, HCLTech remains actively pursuing acquisitions and talent acquisition, particularly in physical AI, agentic AI, and AI-led services. The company hired over 10,000 freshers in the first nine months, with increasing focus on elite engineers possessing the aptitude to work on advanced AI systems. This strategic approach underscores a broader industry reset where growth is driven less by headcount expansion and more by owning high-value AI platforms and services.

HCL Technologies delivered exceptional Q3 FY26 results, demonstrating strong performance across revenue growth, bookings, and margin improvement. The company reported revenue of $3.79 billion for the quarter ended December 31, 2025, marking significant growth momentum in a challenging market environment.

Financial Performance Highlights

The company's financial metrics showcased robust growth across multiple dimensions:

The services business demonstrated consistent performance with IT and Business Services growing 3.8% year-over-year and 1.5% sequentially, while Engineering and R&D Services showed particularly strong momentum with 10.8% year-over-year and 3.1% sequential growth in constant currency terms.

Segment-wise Performance Analysis

HCLSoftware delivered exceptional quarterly performance with 28.1% sequential growth in constant currency, benefiting from seasonal uptick and healthy year-over-year expansion. The division's annual recurring revenue stood at $1.07 billion, representing a 0.6% increase year-over-year in constant currency, fueled by strong traction in data intelligence business.

Geographically, the company saw broad-based growth with India leading at 15.8% year-over-year growth, followed by Rest of the World at 22.1%, Europe at 4.6%, and USA at 1.5% in constant currency terms. Five out of seven verticals registered year-over-year growth, with Financial Services and Technology leading at 8.1% and 14.4% respectively.

AI-Driven Business Transformation

The company's AI strategy continues to drive significant business momentum across four key pillars. Advanced AI services grew 19.9%, led by strong uptick in Agentic physical AI and AI factory programs. The flagship AI Force platform now has specific SKUs deployed across 60 priority accounts, demonstrating substantial market adoption.

The company secured several major AI-driven engagements, including a $473 million five-year strategic partnership with a global apparel retailer to modernize application and data landscape using the Agentic AI Force 2.0 platform.

Strategic Acquisitions and Market Expansion

HCL Technologies strengthened its market position through strategic acquisitions in the telecommunications sector, acquiring Telco Solutions Business from Hewlett Packard Enterprise. This move builds on the successful integration of HPE's Communications Technology Group acquired in 2024, positioning the company as a comprehensive system integrator with extensive telecom IP portfolio.

The company also announced acquisitions of Jaspersoft and Wobby to enhance its data and analytics capabilities, creating a unified end-to-end data intelligence platform that addresses growing demand for metadata management and governance solutions.

Updated Financial Guidance

Based on strong quarterly performance and sustained growth momentum, HCL Technologies raised its full-year guidance:

The company maintains strong financial health with gross cash of $3.82 billion, net cash of $3.55 billion, and healthy cash generation metrics. Operating cash flow reached $2.5 billion over the last 12 months, while free cash flow amounted to $2.35 billion, demonstrating robust cash conversion capabilities.