Porsche has signed a five-year AI partnership with Tata Consultancy Services (TCS), India’s largest IT services company, in a deal valued at almost $1.5 billion.
CNBC reports that under the agreement, TCS will set up a dedicated hub to oversee AI deployment across Porsche’s business. As part of the same deal, TCS will buy Porsche’s IT consulting arm, MHP, for 320 million euros. MHP employs roughly 4,500 people, and the AI partnership only takes effect once that acquisition closes.
Porsche chairman Michael Leiters said in a press release that the partnership combines “automotive expertise with TCS’s digital and AI capabilities” and would help the company compete “in an increasingly data- and software-driven world of mobility.” TCS chief executive and managing director K. Krithivasan said the aim of the MHP purchase and the wider partnership is to “industrialize AI at scale for Porsche.”
Selling MHP is part of “Sportwagenschmiede 35,” Porsche’s plan to improve profitability and cash flow. Speaking about that strategy last month, Leiters said, “We are firmly aligning our company with our core business.”
The deal comes as TCS works to grow its AI business. Its annualized AI revenue hit $2.6 billion in the June quarter, up 13.6 percent from the quarter before. It has been a rough year for Indian IT stocks: the Nifty IT index is down nearly 20 percent since the start of the year, against a drop of just over 7 percent for the broader Nifty 50.
Breitbart News reported last year that Porsche has reconsidered its EV strategy, focusing its development on traditional gas engines:
Porsche, the German luxury automaker known for its iconic sports cars, is reevaluating its EV strategy amid concerns over the volatility of the EV market. Insider sources have revealed that the company is exploring the possibility of equipping some of its originally planned electric models with hybrid drives or internal combustion engines (ICE) in the future. This shift in strategy has been confirmed by Porsche’s Chief Financial Officer, Lutz Meschke, who stated, “Conceptual decisions are being made, but what is clear is that we are committed to the combustion engine for much longer.”
One of the models at the center of this strategic pivot is the Porsche Macan. Despite the successful launch of the fully electric Macan EV last year, which accounted for 66 percent of the model’s total sales in Q4 2024, Porsche is considering introducing a new gas-powered version of the popular SUV. This move is part of the automaker’s exploration of a “range of product scenarios” in response to the unpredictability of the EV market.
The decision to potentially reintroduce an ICE-powered Macan has been influenced by the recent slump in sales of the Porsche Taycan, the automaker’s flagship EV. Once a highlight in Porsche’s EV portfolio, the Taycan experienced a sharp 49 percent decline in sales in 2024, moving just 20,836 units compared to the previous year. While Porsche attributed the drop to the introduction of the Taycan’s facelifted version, the decline has raised broader concerns about the long-term sustainability of EV demand.
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of AI, free speech, and online censorship.