Infosys, the IT services giant, has said that a $1.5 billion agreement with an undisclosed global company has been terminated. The deal focused on
artificial intelligence
(AI) solutions. Signed in September for a 15-year period, the deal aimed to provide digital transformation and modernization services through
Infosys
' platforms and AI solutions.
In a stock exchange filing on Saturday, Infosys stated, "The global company has now elected to terminate the Memorandum of Understanding and the parties will not be pursuing the Master Agreement." However, Infosys did not reveal the name of the global company or whether it was an existing client, said an ET report.
This termination comes shortly after Nilanjan Roy, the company's CFO, unexpectedly resigned after serving in the position for approximately six years. The loss of this deal adds further pressure on Infosys and potentially other IT companies, who have been struggling due to muted business over the past few quarters. In addition to significant senior-level management turnover, which has seen at least eight departures in the past year, this could pose challenges for Infosys' future growth path.
Despite these challenges, Infosys has recently announced several other deals. Last week, the company revealed a five-year agreement with auto parts distributor LKQ Europe. They have also secured significant deals in the past, including a $1.64 billion deal with London-based Liberty Global and a $2 billion deal with an existing client in July. There’s also a $454 million deal with Danske Bank. In the September quarter, Infosys secured its largest deals ever, amounting to $7.7 billion in total.
However, Infosys reported a muted revenue growth in the second quarter of fiscal year FY24, leading them to revise their full-year revenue guidance. They now estimate a growth of 1-2.5% in constant currency terms, compared to their previous projection of 1-3.5%.
Meanwhile, in September, US chip maker Nvidia announced AI partnerships with Indian conglomerate Reliance Industries and IT giant Tata Consultancy Services (TCS) to develop generative AI applications.
On Friday, Infosys shares closed 1.68% higher at Rs 1,562 per share.
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