Tata Communications to Launch AI Studio, Eyes US Stargate Project for Growth
Tata Communications Ltd plans to launch its AI Studio platform-as-a-service by March 2025, building on the AI Cloud it introduced in partnership with Nvidia last year, CEO and MD A.S. Lakshminarayanan announced.
The AI Studio platform will offer services such as data management, multimodal retrieval-augmented generation (RAG), and machine learning operations (MLOps) for enterprises, startups, hyperscalers, and government agencies on a subscription basis.
“We are currently running early-stage trials with some customers and expect a full launch later this quarter,” Lakshminarayanan said. He believes the initial adopters will primarily be startups focused on AI model development.
The Indian government sector also presents an opportunity to build AI models that benefit citizens, while enterprises will experiment with AI models before deploying them at scale.
The AI Cloud infrastructure, powered by Nvidia’s Hopper and Blackwell GPUs, will be rolled out through 2025 and scaled based on enterprise demand. This initiative aims to provide critical AI infrastructure in India, with companies like Tata Consultancy Services (TCS) among the key users.
US Business and the $500 Billion Stargate AI Project
Lakshminarayanan stated that Tata Communications is monitoring the impact of President Donald Trump’s administration on its US operations. The company has a growing presence in the US through acquisitions such as The Switch (a video production company) and Kaleyra (a messaging platform).
Tata Communications has set a $1 billion revenue target for its US business by 2026. While acknowledging policy uncertainties, Lakshminarayanan remains optimistic, noting the company’s existing infrastructure in the US, including data centers, landing stations, and production facilities.
The company is also exploring opportunities in the Stargate AI project, a $500 billion US initiative to build AI infrastructure. Lakshminarayanan highlighted Tata Communications’ edge computing capabilities, which are already deployed in its media business in the US. These capabilities could be leveraged to support AI inferencing at the network edge.
Despite the US’s massive AI investments, he believes India will develop its own AI ecosystem, as countries seek data sovereignty and control over AI-driven innovations. “There will always be a market for AI infrastructure in India,” he added.
Monetization and Financial Performance
As part of its monetization strategy, Tata Communications will bring in third-party investors for its North Carolina-based subsidiary, NetFoundry, leading to a majority stake dilution.
The company has been divesting non-core assets, including the ₹330 crore sale of Tata Communications Payment Solutions Ltd in November 2024. It is also set to sell land to STT Datacenter for ₹750-800 crore, with shareholder approval secured. Tata Communications holds a 26% stake in STT Datacenter.
For Q3 FY25, Tata Communications reported a ₹236.8 crore profit, up 424% year-on-year, though only a slight increase from the ₹227.3 crore profit in Q2. The significant YoY rise was due to a one-time charge in Q3 FY24 following a Supreme Court ruling that had previously impacted profits.
Revenue for the quarter reached ₹5,798.07 crore, marking a 3.76% YoY increase from ₹5,587.78 crore. EBITDA grew 4.1% YoY to ₹1,181 crore, with the EBITDA margin improving by 23 basis points to 20.4%.
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