Davos 2026: Physical AI to grow into $1 trillion industry by 2030, says HCLTech CEO Vijayakumar

Artificial intelligence is entering a decisive inflection point that is triggering a fresh global investment cycle in technology, with nearly $3 trillion in capital expenditure currently underway, HCLTech CEO and managing director C. Vijayakumar said at the World Economic Forum in Davos, Switzerland, on Monday, as reported by CNBC-TV18.

Speaking on the sidelines of WEF 2026, Vijayakumar said one of the most significant emerging themes is physical AI, which combines robotics and artificial intelligence to enable machines to perform complex real-world tasks with greater stability and contextual awareness. He said analysts expect physical AI to scale into a $1 trillion industry by 2030.

Vijayakumar said that while physical AI itself is projected to be a trillion-dollar market, the services opportunities linked to it could also create billion-dollar revenue streams for companies such as HCLTech. He said the firm is identifying entirely new areas of growth that differ from the traditional IT services segments it has historically focused on.

While acknowledging that some existing business lines could face deflationary pressure, Vijayakumar said the new opportunities are compelling and added that HCLTech is aiming to scale its new service lines to $2.5 billion in revenue over the next two to three years.

He said the company sees multiple new service lines emerging beyond the modernisation of existing operations using AI, several of which could independently scale into billion-dollar businesses within a few years.

One such area is what Vijayakumar described as the AI Factory, encompassing large-scale compute and infrastructure programmes driven by GPUs, data centre planning, professional services and managed services. He said this segment alone could easily reach $1 billion in revenue in the coming years.

Across these emerging service lines, HCLTech is targeting cumulative revenues of $2.5 billion over the next two to three years. The company is also open to acquisitions in physical AI, agentic technologies and other AI-led services, with Vijayakumar stating that speed of execution matters more than sequencing.

Highlighting internal adoption, Vijayakumar said that between 25 and 35 percent of coding and development work at HCLTech is now carried out by AI systems. While the company has hired more than 10,000 fresh engineers this year, he said the focus has shifted away from scale towards recruiting elite talent, reflecting a broader shift from quantity to quality.

He added that AI is accelerating client decision-making, particularly around technology modernisation. Vijayakumar said future transformation deals are likely to range between $50 million and $200 million, driven either by cost optimisation or AI-first redesign strategies.

HCLTech recently signed a five-year strategic engagement worth $473 million with a leading global apparel retailer, positioning itself as the client’s long-term AI-led technology partner.

Vijayakumar said a key differentiator for HCLTech is its AI Force Agentic 2.0 platform, which can deliver efficiency gains of up to 30 percent across the software development lifecycle, from requirements gathering to deployment. He said the platform is central to the company’s efforts to modernise clients’ application portfolios and data landscapes using agentic AI.