At a Glance

  • Indian IT services provider Wipro disclosed in a Bank Secrecy Act filing submitted to the U.S. Treasury on Wednesday that it will spend $70.8 million to acquire certain client contracts from California-based technology consulting firm Alpha Net Group to expand its AI business. The deal is expected to close on June 30.
  • Wipro said in the filing that the acquisition will enable the company to "gain access to certain key clients, client contracts, and associated workforce, which will enhance Wipro's existing AI-driven and consulting-led application services capabilities."
  • According to the filing, the contracts Wipro is acquiring generated nearly $100 million in revenue over the past three years. In fiscal 2025, Alpha Net Group reported $29.9 million in revenue from the client base involved in the pending transaction.

Deep Dive

Wipro is betting on AI consulting to revive its struggling IT services business, which saw revenue decline 0.2% year-over-year in constant currency to $2.65 billion in the three months ended March 31. Wipro CEO and Managing Director Srini Pallia said on Thursday's fiscal 2026 fourth-quarter earnings call that IT services revenue fell 1.6% to $10.5 billion in fiscal 2026.

"Geopolitical and policy disruptions have become the new normal," Pallia said. "Client priorities are shifting, and spending decisions are increasingly tied to outcomes. At Wipro, we continue to make decisive investments to navigate an AI-first world."

Wipro's situation reflects a broader and somewhat contradictory industry trend. Although global technology spending is expected to surpass $6 trillion this year, with IT services leading growth, the share available to channel partners is shrinking. A recent Kaseya survey found that the number of businesses spending $25,000 or more annually on managed service providers fell to 41% last year, down from 75% in 2024.

AI is central to this narrative, both posing an existential threat to the IT services business model and promising to unlock future revenue streams as clients seek advisory guidance for adoption. Either way, traditional roles are dissolving, said Alex Smith, vice president and practice lead at Futurum Group.

"The structural logic of the consulting industry for three decades has been based on a simple leverage ratio," Smith told Channel Dive via email. "A small number of senior partners sell projects, and a large number of junior analysts deliver them, billing thousands of hours on essentially mechanical tasks: data collection, process mapping, report generation, requirements documentation. The profit was in that base layer."

Automation is eroding that base layer, as agentic tools handle workflows once delegated to junior consultants. "The junior talent pool is no longer an asset," Smith said. "It's a cost structure, and the most capable partners are looking to manage it away."

The Alpha Net contracts deepen the consulting talent pool Wipro has built through multiple acquisitions, including the $1.45 billion purchase of Capco in 2021.

"Capco is the spearhead of the consulting business," Pallia said Thursday, noting the unit has had one of the highest revenue figures for several quarters.

Although consulting is key to Wipro's AI strategy, the company earlier this month also launched an AI platforms unit to complement its services division. The unit will house multiple Wipro AI platforms targeting industry verticals such as lending, aviation, healthcare, and telecommunications.

"As intelligence becomes industrialized and broadly accessible, we are making deliberate strategic shifts to stay ahead," Pallia said. "The unit will have dedicated leadership, focused investment, and a distinct operating model to accelerate enterprise-grade agentic AI solutions. The unit will also incubate new AI-led businesses through an invest-build-partner approach, collaborating with Wipro Ventures and our partner ecosystem."