Tata Comms Deploys First Batch of Nvidia AI Chips, Boosts Internal AI Capabilities: MD A.S. Lakshminarayanan

Tata Communications Ltd has started using the first set of artificial intelligence (AI) chips from Nvidia within the company. This information was shared by managing director (MD) and chief executive officer (CEO) A.S. Lakshminarayanan in an exclusive interview. The digital infrastructure provider is investing in building its own AI capabilities.

Lakshminarayanan mentioned that select customers will get access to the chips soon, with wider availability expected by the end of the year.

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“We have received some chips and are currently installing and implementing them,” said Lakshminarayanan. “We are investing internally in AI, using these chips for various internal use cases. Select customers will get them first, but broader availability will be by the year’s end.”

Nvidia and Tata Communications are working together to develop an AI cloud in India. This partnership aims to provide critical AI computing infrastructure and platforms for enterprises, including Tata Consultancy Services Ltd (TCS).

Tata Communications reported a ₹333 crore profit for the quarter ending June 30, down 13% from the same quarter last year, despite an 18% increase in revenue to ₹5,633 crore.

Earnings before interest, tax, depreciation, and amortization (Ebitda) rose by 9.8% to ₹1,124 crore from ₹1,024 crore in the same quarter last year. However, the Ebitda margin fell by 150 basis points to 20% from 21.5% in Q1 FY24.

The drop in profit was attributed to the impact of acquiring The Switch and Kaleyra, as well as other non-profitable subsidiaries. However, the top executive noted that the decrease in Ebitda margin was expected and aligned with their strategy of investing in future growth.

During the March 2024 quarter, the company mentioned that one of its subsidiaries had issued a termination notice to a customer, hinting at Vodafone Idea Ltd without naming it, and was in discussions on a disengagement transition plan. Further discussions are ongoing regarding pending dues.

“We expect the payments due to us will be made as our relationships were good last quarter. We are still in the early stages of contract termination and separation,” Lakshminarayanan said.

He added that the main focus is on organic growth, supported by recent acquisitions of The Switch and Kaleyra. These acquisitions are expected to turn profitable in two years.

Lakshminarayanan also stressed the need for proper pricing for leasing spectrum from telecom companies for private 5G networks. He noted that 5G is taking time due to its high costs. Although the government has plans to support enterprises, more needs to be done to assist private networks for businesses. He also mentioned that the 5G device ecosystem for factories needs to grow, and enterprises must determine the return on investment before signing contracts.

He concluded by stating that the Indian market is more optimistic than the global market, which faces challenges due to macroeconomic conditions and conflicts in Europe.