IT Stocks Under Pressure: Anthropic AI Sparks Global Selloff

A Global Tech Tremor

Indian information technology (IT) stocks, including heavyweights like Infosys, Wipro, and Tata Consultancy Services (TCS), faced significant selling pressure on Wednesday, February 4, 2026. The downturn was a direct reaction to a technology-led rout on Wall Street, triggered by new product announcements from US-based artificial intelligence startup Anthropic. The launch of advanced automation tools sparked immediate fears among investors about the potential for AI to disrupt the traditional business models of IT services and software companies worldwide.

The initial signs of trouble emerged in overnight trading in the United States. American Depositary Receipts (ADRs) of Infosys plunged 5.56% to close at $17.32, while Wipro's ADRs fell 4.83% to $1.56. This sharp decline in US-listed securities set a negative tone for the Indian market, where the Nifty IT index subsequently opened with a drop of over 5%.

What Triggered the Selloff?

The market turmoil was ignited by Anthropic's unveiling of new plug-ins for its AI platform, Claude Cowork. These tools are designed to automate a wide range of professional tasks across corporate functions such as legal, sales, marketing, and data analysis. The announcement detailed capabilities for handling complex workflows, including contract reviews, non-disclosure agreement (NDA) screening, and compliance management. These are precisely the types of high-volume, process-oriented tasks that global corporations often outsource to Indian IT service providers.

Investors interpreted this development as a direct challenge to the outsourcing model. The core concern is that corporations might increasingly opt for sophisticated in-house AI tools like Anthropic's, reducing their reliance on external IT vendors. This could lead to intense pricing pressure, shrinking margins, and a fundamental threat to the revenue streams of established IT firms.

The Ripple Effect Across Markets

The fear was not confined to India. The selloff had a broad impact across global technology and data services sectors. In the US, the tech-heavy Nasdaq Composite index fell 1.43%, while the S&P 500 declined by 0.84%. The damage to specific stocks was far more severe. Data and professional services firms saw steep declines, with Gartner shares plummeting by approximately 25%. IT consulting giants Cognizant and Accenture both fell by around 10%.

European markets echoed the sentiment. Shares of companies like Experian, Sage, and the London Stock Exchange Group dropped between 6% and 12%. The widespread nature of the selloff underscored a collective investor reassessment of any business reliant on data processing, professional services, and subscription-based software models.

Anthropic's Meteoric Rise

Adding to market anxiety is Anthropic's rapid emergence as a formidable player in the AI space. Founded in 2021 by former employees of OpenAI, the company has quickly gained traction. According to a report from Jefferies, evidence suggests that Anthropic's Claude is increasingly winning the corporate market from OpenAI. The firm's AI coding tool, Claude Code, launched in May of the previous year, reportedly reached $1 billion in annualized recurring revenue by November.

This impressive performance has fueled a surge in the company's valuation. Anthropic is reportedly in a funding round to raise about $10 billion, which would value the company at an estimated $150 billion. This marks a significant jump from its $183 billion valuation in September and underscores the immense capital flowing into disruptive AI technologies.

Analyst Commentary and Sector Outlook

The market reaction has been amplified by a cautious stance from institutional analysts. Brokerage firm Jefferies noted in a recent report that it had reduced its exposure to the IT sector in its India model portfolio. The brokerage's weight for the sector now stands at 5.6, significantly below the MSCI India index weight of 9.7. This move reflects broader concerns about the sector's vulnerability, especially amid sustained outflows from foreign portfolio investors.

While Anthropic clarified that its legal tool is not a substitute for licensed attorneys, the market has focused on the broader trend of automation. The immediate sentiment is that AI is moving from an augmentation tool to a replacement technology, posing a structural risk to service-based business models.

The Road Ahead for Indian IT

While the short-term outlook appears challenging, the long-term narrative is still unfolding. Indian IT companies are not standing still. They have been actively investing in their own AI capabilities, such as Infosys Topaz and Wipro's ai360 platform, to integrate artificial intelligence into their service offerings. The challenge now is to pivot from providing traditional outsourcing services to becoming essential partners that help clients navigate and implement complex AI transformations.

The recent selloff serves as a critical reminder of the sector's sensitivity to global technological shifts. The key to future growth will lie in the ability of these firms to adapt, innovate, and demonstrate that AI is not just a threat but a powerful opportunity to create new, higher-value business models.