On June 11th, TCS announced an exclusive partnership with Anthropic — 50,000 employees trained on Claude, early access to new models, a dedicated business unit. The next day, a US export control order cut off access to Anthropic&#x27;s most advanced models for users worldwide, including the very partner that had just signed up for early access.<br>India&#x27;s IT sector has spent years building its AI pivot on the assumption that access to frontier models would stay open. That assumption just cracked. And while India accelerates its own sovereign AI mission, analysts say that alone won&#x27;t be enough to fix what just happened.<br>So what would?<br>Tune in.<br>Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

India's IT sector bet its future on AI access it doesn't actually control

Daybreak

# Full Transcript

**Podcast:** Daybreak

## Participants

- **Reacher Varghese** (None)
- **Snigdha Sharma** (The Ken)
- **Nikhil Narendran** (Trilegal)
- **Abishar Prakash** (Canada-based advisory firm)
- **Chandrakant Agrawal** (AI solutions company)
- **Anushree Varma** (Gartner)

## Transcript

If you are someone who uses Claude, then you have seen the little note that pops up about Fable 5. When you try to switch models on the platform, the top option which is usually the best one and which right now claims to be for your toughest challenges is greyed out. And it says that it is currently unavailable.

It has been that way for users around the world since June 12th, ever since a US export control order that targeted Anthropic's newest models Fable 5 and Mythos 5 was released. The initial order required the company to take it down for foreign nationals only. But because Anthropic couldn't confidently identify the citizenship of its users, it ended up blocking up those models for every user around the world.

Now, everyone has been talking about this shutdown. But something happened just the day before June 12th that got completely overshadowed by these headlines. On June 11th, Tata Consultancy Services, or TCS, announced a huge partnership with Anthropic.

50,000 employees would be trained on Claude. A dedicated business unit would be set up so that TCS could package Anthropics models into its enterprise offerings and tailor make it to suit different clients from different sectors. Also, TCS would get early access to Anthropics' latest models all before public release.

Now, this is the kind of exclusive partnership that allows TCS the opportunity to reliably say that it understands a model far better than any competitor who only got access to it on release. And that's important for a company like TCS. Because ever since Agentic AI really blew up earlier this year with Claude Cowork, IT service companies like TCS are under an existential threat. And they even have a name for it.

At the end of April this year, HCL Tech, Infosys, TCS, and Wipro all announced their quarterly results. See Vijay Kumar, who is the CEO of HCL, called it AI deflation, which he explained as a dip in future revenue of about 3-5% in the coming year and maybe even more in the future.

Even TCS saw its revenue slip 0.5% year over year and K. Kritivasan, its CEO, admitted that even he is seeing the deflation, though he called it degrowth. The only part to survival for them? To reposition themselves as AI integration partners. And that's what the TCS-Anthropic partnership was all about. And it's not just TCS that's been making these moves either.

For example, in mid-May this year, HCL Tech invested $150 million in Sarvam AI, becoming the lead investor in Sarvam's Series B round. Also, in February this year, as Anthropic was opening its first office in India, it announced a partnership with Infosys. So clearly, for TCS, this strategic repositioning was in full swing.

Exc...

India's IT sector bet its future on AI access it doesn't actually control

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

India's IT sector bet its future on AI access it doesn't actually control

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.