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New automation tools linked to artificial intelligence have created a stir in global stock markets. After Anthropic’s move, investors feared a decline in demand for software and IT services. The impact was felt in India, where IT majors including TCS, Infosys and HCL Tech lost more than ₹2 lakh crore in market capitalisation. Globally, tech and financial stocks also saw heavy selling.
Today, India’s stock market saw neither a significant decline nor a significant gain, but one sector, the IT sector, is experiencing a significant decline. The reason for this is not economic statistics, but the growing advances in artificial intelligence (AI). As the world realized that AI is no longer just a helpful tool, but is gaining the ability to take over entire tasks, IT sector stocks came under pressure. Even India’s leading IT companies were not spared the shock, and over ₹2 lakh crore worth was wiped out from the market within a short period of time.
Tata Consultancy Services (TCS), the country’s largest software company, suffered the biggest loss. The fall in its shares reduced its market cap by around ₹70,481 crore. Investors were followed by Infosys, which lost around ₹54,011 crore due to the sale. HCL Technologies also suffered a significant loss, posting a loss of around ₹26,811 crore. The situation was no better for mid-cap and other IT companies—LTIMindtree lost around ₹14,276 crore, Wipro around ₹10,907 crore and Tech Mahindra lost ₹10,533 crore in market cap.
The roots of this upheaval originated from America. As Anthropic AI introduced its new office automation and productivity tools, investors began to fear what would happen to traditional software and outsourcing models. The company added an automation layer to its enterprise AI assistant that can handle the entire business workflow. This raises the question of whether companies will need as much IT services and custom software in the future as they do today.
This fear was also echoed in global markets. In the US, Goldman Sachs’ basket of software stocks fell nearly 6 percent in a day, its biggest drop since April. An index of financial services companies fell nearly 7 percent. Interestingly, this sale started even before the US markets opened. According to traders, stocks such as Experian, RELX, and London Stock Exchange Group saw a sudden drop following the information posted on Anthropic’s website. Investors feared that if AI started making decisions and carrying out processes on its own, many existing software companies could lose their usefulness.
However, the Asian tech sector appeared relatively stable, as the focus remained on hardware and chip makers, which are benefiting from AI investments. In contrast, stocks such as Thomson Reuters and LegalZoom fell the most in North America, leading the iShares Expanded Tech-Software Sector ETF to drop about 4.6 percent. The ETF has been falling for six consecutive sessions, and in January, it posted a whopping 15 percent drop, considered the worst since 2008.
AI storm from America, movement in Indian IT sector, market cap of 2 lakh crore cleared in a single day
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