Dive Brief:
- Cognizant acquired managed infrastructure services provider Astreya to expand its AI building capabilities, the companies said in a Wednesday announcement. The transaction is expected to close in Q2 for an as-yet-undisclosed sum.
- Astreya brings 25 years of data center managed services experience, a proprietary AI operations platform and existing business deals with six of the seven largest cloud providers. Cognizant singled out Astreya’s Google Cloud and ServiceNow alliances as particularly valuable assets.
- “AI data center investment is a critical path for future economic and job growth,” Surya Gummadi, president of Cognizant Americas, said in the announcement. “We expect the acquisition of Astreya will meaningfully expand Cognizant’s AI Infrastructure capabilities and enhance our powerful ‘Magnificent Seven’ hyperscaler relationships.”
Dive Insight:
Cognizant has aggressively pursued hyperscaler partnerships to transform its technology consulting and IT services business into an AI powerhouse.
The company expanded its AWS practice to drive manufacturing sector cloud and AI adoption in October 2024, signed on to Microsoft’s Frontier Firm transformation initiative in December, and adopted Google Cloud’s Gemini Enterprise internally as part of a broader alliance extension in February.
Cognizant charted a parallel path in M&A, adding more than 1,000 cloud engineers to its ranks with the November purchase of Azure service provider 3Cloud.
The efforts have paid off amid a sustained boom in hyperscaler AI infrastructure investments. Despite ongoing economic uncertainty and a treacherous MSP market, the company’s revenues grew 5.8% year over year to $5.4 billion during the three months ended March 31. Bookings increased 21% year over year, driven in part by seven deals worth $100 million or more, CEO Ravi Kumar S said during a Q1 2026 earnings call Wednesday.
“This is probably the highest bookings growth we have seen since I have been on board three years ago,” said Kumar.
Cognizant has nevertheless lost roughly 25% in market valuation over the last year, according to Macrotrends’ tracker.
The company has been caught up in an industrywide shift to AI that’s cast doubt on existing business models as automation takes hold in IT services.
Kumar has led a charge toward AI enablement as enterprises grapple with infrastructure roadblocks and other deployment challenges.
“With AI, the fundamentals are shifting,” Kumar said. “Software is penetrating deeper into enterprises, and our clients now expect more value and measurable outcomes.”
Cognizant has sought to redefine the role of IT services, with a focus on delivering full-stack capabilities as part of what the company calls an “AI builder” strategy.
“We're evolving away from simply delivering projects to underwriting operational results for our clients at scale, taking full accountability for the business impact we create,” said Kumar. “As the importance of platforms grows, we are evolving our commercial models towards fixed- and outcome-based pricing.”
Acquisitions that expand the company’s AI building capacity remain part of the evolving playbook.
“This is a phenomenal time to create value from M&A in line with our reforge-first principles, which is about having a platform play, managing business on outcomes versus effort, and AI enabling our offerings,” Kumar said.
