Infosys loses its biggest AI tech deal worth $1.5bn

BENGALURU: Infosys said on Saturday that a $1.5-billion AI contract with a global customer that was announced in September has been terminated. It, however, didn’t disclose the details of the client and the reasons for termination. This was Infosys’s biggest AI deal announced so far.
“This is in continuation to the disclosure made by Infosys vide letter dated September 14 with respect to a MoU with a global company.The global company has now elected to terminate the MoU and the parties will not be pursuing a Master Agreement,” Infosys said in an exchange filing on Saturday.
The deal was expected to fetch Infosys $100 million annually for 15 years of the deal’s tenure. Such cancellations have deeper ramifications on business and people, especially in a subdued market when clients are pulling back on discretionary spending.

Ray Wang, CEO of US based IT consultancy Constellation Research, said, “When you win or lose a deal this big, you traditionally must address the staffing ramp-up or reduction. “However, in AI deals, there is a much less impact because we are now in a world where we are competing with bots not humans and the more automation we deliver, the less humans we need. So, in the future, the labour impact will become less and less of an issue.”
Phil Fersht, CEO of US IT advisory HfS Research, said there have not been many (cancellations) in recent years and so, the impact on morale will be harmful.
In the September quarter earnings announcement recently, Infosys CEO Salil Parekh said the company had its highest large deals value at $7.7 billion in the quarter. He said given the uncertain macro environment, this was a testament to Infosys’s ability to pivot.