We recently went through the reporting season for IT service providers. A notable development is the clear transition from discussing artificial intelligence to actively pursuing its monetization. In a move reminiscent of the early days of “Digital,” leading service providers like Accenture (for last few quarters) and HCLTech (starting last quarter) are now quantifying their AI earnings, giving investors and clients a tangible view of the value AI is already delivering.

  • For the first time, HCLTech quantified its GenAI topline. The company reported that its “Advanced AI” quarterly revenue crossed the $100 million mark. While modest, the firm is likely on track for almost $0.5bn AI revenue this FY. HCL Tech’s announcement was the first among the large India heritage service providers. We expect others to follow suit.
  • Accenture reported that in FY 25, it tripled its FY 24 Generative AI revenue, reaching $2.7bn. It also reported its GenAI bookings to $5.7bn in FY 25. These numbers demonstrate the immediate and massive expected demand for AI transformation services. Accenture’s AI and data professionals headcount has nearly doubled to deliver close to 6,000 “advanced AI projects”.

Deciphering the AI Service Revenue is tricky

Interpreting these new “AI revenue” categories requires a healthy dose of skepticism. We’ve seen this movie before. When IT firms started reporting “Digital Revenue,” nobody could agree on what counted. Cloud migration? Modern tooling? Everything with an API? AI revenue deserves the same scrutiny: Broad definitions rule early stages. Like “Digital,” AI revenue is likely to be broadly defined initially. It often encompasses not just the core Generative AI model deployment (e.g., building a Copilot), but also the foundational work, such as data modernization, cloud infrastructure setup for AI models, and consulting/strategy for AI adoption. This is important, as foundational work is a prerequisite for any scaled AI project.

  • Bookings aren’t revenue. Accenture’s $5.7 billion in GenAI bookings signals strong client commitment. But bookings represent signed contracts for future work, not completed projects. Revenue lags bookings—sometimes by quarters. High bookings today don’t guarantee smooth delivery tomorrow.
  • The Digital parallel holds lessons. When firms first carved out “Digital” revenue, they signaled an irreversible shift in how they went to market. AI revenue follows the same pattern. Expect definitions to sharpen as the market matures. Providers will eventually separate pure AI application development from AI-enabled services (using AI to make traditional outsourcing cheaper and faster).

A Strong Signal for Future Growth

The strong AI-focused numbers come at a time when the overall growth environment for IT services remains somewhat cautious due to global macroeconomic uncertainties. The push for AI, particularly Agentic AI, is acting as a counter-cyclical catalyst. Clients are prioritizing AI as an avenue for cost-efficiency and productivity gains, compelling them to invest despite broader budget tightness.

This dual reporting means AI will be the essential growth engine for the next decade of IT services. Traditional services revenue stalls while AI bookings surge. The contrast couldn’t be sharper! Service providers have moved beyond implementation and they’re rebuilding client business and operating models with AI at the core.

The race is on. The market finally has hard numbers to separate leaders from laggards.