Tata Communications Enhances AI Power with First Batch of Nvidia AI Chips

By siliconindia  |  Monday, 22 July 2024, 08:50:55 AM IST

Tata Communications Enhances AI Power with First Batch of Nvidia AI Chips
Tata Communications Ltd has begun incorporating the initial batch of Nvidia's artificial intelligence (AI) chips within the company, according to Managing Director (MD) and Chief Executive Officer (CEO) A.S. Lakshminarayanan in an exclusive interview. The digital infrastructure provider is investing in developing its own AI capabilities. Lakshminarayanan stated that select customers will have access to the chips shortly, with broader availability anticipated by the end of the year.
“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 Rs 5,633 crore.
Earnings before interest, tax, depreciation, and amortization (Ebitda) increased by 9.8%, reaching Rs 1,124 crore compared to Rs 1,024 crore in the same quarter last year. Despite this rise, the Ebitda margin declined by 150 basis points to 20% from 21.5% in Q1 FY24. The reduction in profit was attributed to the acquisition of The Switch and Kaleyra, along with other non-profitable subsidiaries. However, the top executive mentioned that the decline in Ebitda margin was anticipated and in line 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 emphasized that the primary focus is on organic growth, bolstered by the recent acquisitions of The Switch and Kaleyra, which are expected to become profitable within two years. Lakshminarayanan also highlighted the importance of appropriate pricing for leasing spectrum from telecom companies for private 5G networks, noting the slow adoption of 5G due to its high costs. While the government has plans to support enterprises, more assistance is needed for private business networks. He added that the 5G device ecosystem for factories needs to expand, and enterprises must assess the return on investment before finalizing contracts.

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