Among the worst hit were Persistent Systems, Coforge, Mphasis and LTIMindtree, which declined between 3% and 5%. Heavyweights including Wipro, Tata Consultancy Services and Infosys were down 2% to 3%.
The Nifty IT Index extended its weekly drop to 7%. The index declined 2.2%, underperforming the benchmark Nifty 50 index, which gained 0.8%.
The continued sell-off has dragged the Nifty IT index over 40% below its record high hit in December 2024.
The weakness in IT stocks follows OpenAI’s latest announcement around the launch of the OpenAI Deployment Company. The new venture aims to help enterprises build and deploy AI systems for day-to-day operations through direct partnerships and embedded AI engineering teams.
OpenAI said the initiative is backed by 19 global investment firms, consultancies and system integrators, including TPG, Advent International, Bain Capital, Brookfield Corporation, Goldman Sachs, SoftBank Group and Warburg Pincus.
Analysts believe the new model could disrupt the traditional IT services structure, as OpenAI plans to place forward-deployed engineers directly within client organisations to identify AI opportunities, redesign workflows and deploy production-scale AI systems.
According to market participants, these are functions traditionally handled by global IT services firms such as Infosys, Cognizant and Accenture.
The concerns intensified further after Anthropic launched a similar AI-native enterprise services business earlier this month, backed by investors including Blackstone, Hellman & Friedman, Apollo Global Management and Sequoia Capital.
Indian IT companies have consistently maintained that they remain critical partners for enterprises because they understand clients’ legacy infrastructure, manage implementation risks and integrate AI into existing systems.
However, the Street fears that companies like OpenAI and Anthropic could increasingly control the higher-value strategy and workflow design layer, leaving traditional IT firms with lower-margin execution work.
That said, analysts also point out that Indian IT firms themselves have partnerships with these AI companies.
Infosys, for instance, has partnered with both OpenAI and Anthropic, integrating Codex into its Topaz AI platform and developing Claude-powered AI agents.
Analysts believe the relationship between IT firms and large language model providers could eventually evolve into a mix of direct competition and collaboration.
