Porsche AG and India-based Tata Consultancy Services (TCS) on Monday announced a five-year partnership valued at €1.25 billion (approximately $1.46 billion) centered on artificial intelligence. The agreement includes the acquisition of Porsche’s IT consulting subsidiary, MHP, by TCS for €320 million, according to a company release.
Under the terms of the deal, TCS will establish a specialized hub to oversee the deployment of artificial intelligence across Porsche’s business operations. The full partnership will become effective after TCS completes its acquisition of MHP, a firm that employs approximately 4,500 people.
In a press release, Michael Leiters, chairman of Porsche, stated the collaboration will combine Porsche’s “automotive expertise with TCS’s digital and AI capabilities.” He added that the partnership aims to increase the automaker’s efficiency and competitiveness.
The sale of MHP is part of Porsche’s “Sportwagenschmiede 35” strategy, which the company has described as an effort to improve profitability and focus on its core business. “We are firmly aligning our company with our core business,” Leiters said in a statement last month, noting that a key element involves streamlining operations.
For TCS, India’s largest IT services firm, the deal represents a significant expansion in the European automotive sector. K. Krithivasan, chief executive and managing director of TCS, stated that the company aims to “industrialize AI at scale for Porsche.” He said the acquisition will also enhance TCS’s presence in the German market and among other European industrial clients.
The agreement follows a series of AI-focused business deals for TCS. The company reported its annualized AI revenues reached $2.6 billion in the quarter ending in June, a 13.6% increase from the previous quarter.
 announce a five-year, €1.25 billion AI partnership. TCS will acquire Porsches MHP subsidiary for €320 million, expanding its European market presence.){kind=link}