Wipro Lags Rivals as Deal Wins Slide and Q4 Outlook Disappoints

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Wipro, India’s fourth-largest IT services provider, delivered a weaker-than-expected outlook for the current quarter on Friday after reporting its lowest deal bookings in six quarters, underscoring its struggle to keep pace with larger rivals amid uneven demand.

The Bengaluru-based firm said it expects revenue growth in the fourth quarter to range from flat to 2% sequentially, including contributions from acquisitions. That fell short of market expectations, with Kotak Institutional Equities forecasting growth of 1.5% to 3.5%. Following the announcement, Wipro’s U.S.-listed shares dropped as much as 7.2%.

The subdued guidance contrasted with stronger performances from bigger competitors such as Tata Consultancy Services and Infosys, both of which reported steadier deal wins and better-than-expected revenue in the seasonally weak third quarter.

“Wipro’s revenue growth was broadly in line with estimates, but deal wins were slightly below average. More importantly, its guidance is below street expectations,” said Anmol Garg, an analyst at DAM Capital.

Wipro reported total deal bookings of $3.34 billion for the December quarter, its weakest showing in six quarters, down from $4.69 billion in the previous quarter and $3.5 billion a year earlier. Consolidated revenue rose 5.54% year-on-year to 235.56 billion rupees ($2.59 billion), beating analysts’ average estimate of 233.91 billion rupees, according to LSEG data.

Net profit, however, fell 7% to 31.19 billion rupees, missing market expectations. The quarter included a one-time charge of 3 billion rupees linked to India’s new labour codes, adding pressure to earnings.

Analysts said margins remain under strain as Wipro continues to invest heavily in AI-driven delivery models while absorbing higher compliance costs and rising wages. “Wipro is prioritising long-term capability building, even as demand remains uneven,” said Gaurav Parab, an analyst at NelsonHall.

SECTOR SIGNALS TURN MIXED
The broader outlook for India’s $283 billion IT sector is showing tentative improvement. Smaller rival Tech Mahindra beat third-quarter revenue estimates on Friday, supported by stronger demand from communications clients.

After cutting back discretionary spending amid tariff-related uncertainty, clients are gradually increasing investment in AI-led projects. Wipro Chief Executive Srini Pallia said there is “a very clear shift towards AI-led transformation,” though the benefits have yet to fully translate into stronger deal momentum for the company.

Tech Mahindra struck a more optimistic tone. Chief Executive Mohit Joshi said the company expects to outperform peers in revenue growth next fiscal year, citing stabilising client spending in the United States and signs that Europe could move from stability into a growth phase.

For now, Wipro’s softer deal pipeline and cautious near-term guidance highlight the uneven recovery across India’s IT services landscape, even as AI-driven demand begins to re-emerge.

BBC Set to Strike Content Deal With YouTube, FT Reports

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The BBC is planning to produce programmes specifically for YouTube for the first time, as the British public broadcaster looks to diversify revenue streams amid a shift in viewing habits toward online platforms, the Financial Times reported on Friday.

According to the report, the BBC will create tailored shows designed initially for YouTube audiences, which would later also be made available on the broadcaster’s own platforms, including BBC iPlayer and BBC Sounds. The deal could be announced as early as next week, the FT said, citing sources familiar with the plans.

The BBC declined to comment on the report, while Google, which owns YouTube, did not respond to a request for comment outside normal business hours.

The BBC is primarily funded through a licence fee paid by UK households that watch television, allowing its domestic services to remain free of advertising. However, the FT said the YouTube partnership would focus on younger audiences and enable the BBC to generate additional income by running advertisements on content viewed outside Britain.

A limited number of older BBC series may also be made available on YouTube, though this is not expected to be the core of the agreement, the report added.

The move comes as YouTube’s reach in the UK continues to grow. In December, YouTube attracted 51.9 million British viewers, narrowly overtaking the BBC’s 50.8 million, according to Barb Audiences, the UK’s official body for measuring television and video consumption.

Separately, the BBC remains embroiled in legal controversy in the United States. U.S. President Donald Trump is suing the broadcaster for at least $10 billion over the editing of clips from a speech that appeared to suggest he directed supporters to storm the U.S. Capitol on January 6, 2021. The BBC has apologised for the edit, which led to the resignations of its two most senior executives, but has said it will contest the lawsuit and seek its dismissal.

Musk Suffers Setback Over Grok Deepfakes, but Regulatory Battle Continues

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Efforts by European regulators to rein in artificial intelligence–generated deepfakes scored a rare early victory this week after xAI moved to curb the creation of sexualized images by its Grok chatbot. Yet officials and legal experts say the wider regulatory fight against AI-driven abuse is far from settled.

xAI said late on Wednesday it had restricted image-editing features for Grok users after the chatbot produced thousands of sexualized images of women and minors, triggering global backlash. The move marked a reversal for billionaire owner Elon Musk, who initially downplayed the controversy.

Regulators say the episode underlines how difficult it is to police AI tools that make the creation of explicit or degrading content fast, cheap and scalable. It is the latest flashpoint between Musk and European authorities, following earlier disputes over election interference, content moderation and free speech on X.

Legal uncertainty remains widespread. Many governments are still refining rules on what constitutes nudity, how consent should be defined in AI-generated content, and whether responsibility lies with users or platforms. “It’s really a grey zone with regards to the creation of nude images,” said Ängla Pändel, a data protection and privacy lawyer at Mannheimer Swartling.

Britain’s media regulator Ofcom welcomed xAI’s decision but said its investigation into Grok remains open. “Our formal investigation remains ongoing,” a spokesperson said, adding that regulators are seeking answers on what went wrong and how safeguards will be strengthened.

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PRESSURE FOR STRONGER ENFORCEMENT
Earlier this month, Grok generated hyper-realistic images of women on X that appeared to digitally “undress” them or place them in degrading scenarios, including some involving minors. Until midweek, Reuters testing found the chatbot could still generate sexualized images privately on request. xAI said it is now blocking such outputs in “jurisdictions where it’s illegal,” without specifying which ones.

Malaysia and Indonesia have imposed temporary bans on Grok, while regulators in the UK, France and Italy launched probes. At the EU level, lawmakers say tougher enforcement is still needed. Christian Democrat MEP Nina Carberry called xAI’s changes a “positive step” but said stronger action under the Digital Services Act is required to stop platforms from sexualizing women and children. A European Commission spokesperson said the bloc would use the DSA’s full enforcement powers if the changes prove ineffective.

Under the UK’s Online Safety Act, sharing intimate images without consent—including AI-generated deepfakes—is a priority offence, said Alexander Brown, a lawyer at Simmons & Simmons. Ofcom can fine companies up to 10% of global revenue or seek court orders to block services in severe cases.

For victims, however, legal remedies remain burdensome. “Taking platforms to court is a really difficult and heavy process,” said Anders Bergsten, another Mannheimer Swartling lawyer, pointing to the emotional toll on those affected.

Deepfakes predate today’s AI boom but were once confined to fringe corners of the internet. Grok’s integration with X gives them unprecedented reach, said U.S. cyber-harassment lawyer Carrie Goldberg. “The frictionless publishing capability enables the deepfakes to spread at scale,” she said.

The EU’s AI Act currently focuses on transparency rather than outright bans for adult deepfakes, while service suspension under the DSA is considered a last resort. Still, political pressure is mounting. UK Prime Minister Keir Starmer welcomed xAI’s move but warned that free speech does not extend to violating consent. “Young women’s images are not public property,” he said, adding that Britain is prepared to strengthen laws further if needed.